Over 60 per cent of consumers will cut down on non-essential categories like apparel, footwear, jewellery, and accessories if they are forced to reduce their holiday shopping budget, according to a recent International Business Machines Corporation (IBM) report. Nearly half of consumers will spend less if inflation continues to drive price increases.
As COVID-19 pandemic concerns abate for many consumers, worries are shifting towards uncertain economic and supply chain conditions this holiday season. Moreover, 2022 shopping budgets are up 8 per cent over 2021 — in line with Bain’s economic forecast, according to ‘The 2022 Holiday Shopping and Travel Report’ by technology company IBM.
However, factors including inflation and price increases have made economic concerns top of mind this holiday season. While 59 per cent of consumers surveyed say they will be less concerned about COVID-19, two in three say they will be more concerned about the economy. Fifty-nine per cent of respondents report worrying more about supply chain disruptions that could make holiday shopping harder or more expensive.
“According to the survey results, in 2022, consumers are hoping to re-embrace holiday traditions they've had to alter for the past two years,” said Karl Haller, Partner, Consumer Center of Competency Leader, IBM Consulting. “They’re starting their shopping and travel planning earlier but also want to hedge their bets with options like free returns or cancellations. To adapt to these changes in consumer behaviour, retailers will need better visibility and traceability across product inventory, fulfilment, and returns. AI can help them understand, prioritise, and resolve critical issues in real time.”
The study found that uncertainty around inflation, gas prices, and supply chain is driving consumer plans. If goods are not available due to supply chain issues, 41 per cent of respondents say they will spend less – but 30 per cent will spend more if they can find substitutions easily. If gas prices go down, 35 per cent of consumers surveyed will do more in-store shopping.
Continuing the shift away from the traditional Black Friday start of the shopping season, 58 per cent of consumers surveyed plan to start holiday shopping before November, compared to 44 per cent last year. Almost two in three plan to pre-order this holiday season to get their products on-time with guaranteed prices.
At the same time, consumers want to keep their options open. Nearly seven in ten respondents surveyed will opt for brands or retailers that offer free cancellations, order changes, and returns, as well as a COVID-19-safe environment this holiday season. The study findings seem to indicate these perks are often worth the price due to the continued worries around supply chain and product availability this season.
Three fourths (73 per cent) of respondents said they are considering sustainability when shopping for the holidays. Twenty-nine per cent of consumers surveyed will bundle multiple orders to help reduce carbon emissions, while 38 per cent will avoid single-use plastics, and two in five will choose to shop nearby (42 per cent), and buy products that are branded as being environmentally sustainable or socially responsible (41 per cent). Notably, respondents surveyed are willing to pay an average premium of 41 per cent for sustainable products, 34 per cent for sustainable air travel, and 37 per cent for sustainable lodging this holiday season.
Fibre2Fashion News Desk (NB)