The 2022 holiday season is on the horizon. It seems holiday shopping starts earlier each year, with July’s Amazon Prime Day sales and now a second round of sales from Amazon and other sellers that seek to match their activity. Digital Commerce 360, in conjunction with Bizrate Insights, surveyed 1,088 online shoppers in September to gauge their likely behavior.
2022 will be an interesting year as inflation looms, promotions are projected earlier than ever, and the profitability of the season is on the line. The results are revealing, and I will provide a series of retailer recommendations that should be in consideration to optimize the season.
Online shoppers continue to give a substantial share of their gifting wallet to the online channel
Our survey data reveals that three in four online shoppers will complete at least half of their holiday purchases online.
- 50%+ online: 73%
- 25%-49% online: 14%
- 10%-24% online: 9%
- 1%-9% online: 4%
Holiday gift buying online is on par with the past few years
Though shoppers may have reached a saturation point when it comes to online holiday gift shopping, buying remains strong. It will be interesting to see if some shoppers may find renewed interest in the physical store for its festive nature or simply to be sure they get the gifts on their list. A quick look at three-year survey results finds online behavior of 50%+ online buying is at 73% for 2022, up from 74% in 2021 and a high of 77% in 2020.
Given the current economic conditions, shoppers will be focused on finding competitive prices due to inflation and personal circumstances. From a financial perspective, 40% of consumers indicate they will comparison shop more due to likely high prices and 35% expect that high inflation will cause them to purchase less overall. Just 16% thought they would seek out retailers that price match, which is typically a challenge and can be time consuming. It was certainly insightful that 13% would be willing to pay for free shipping for ideal gifting. And when it came to where they would shop, 24% said they would concentrate their shopping even more on Amazon. Though smaller in numbers, 16% reported that they would be seeking out values-driven retailers while 11% would be looking for experiences rather than products over the holiday season.
Inventory issues abound, and 23% of respondents expect to see more out-of-stock messages. We wanted to gauge the impact of Prime Day shopping, and here, only 7% suggested they would reduce later shopping as a result. My guess is shoppers have one list, one budget and the dollars get doled out based on how retailers play their cards. And based on our research, 19% of respondents said they would be spending the same.
Shopping behavior compared with 2021
Taking a look at how online shopper behavior will compare relative to 2021, one in three respondents said they will shop more or mostly online. Timing remains a factor, with 30% of consumers intending to shop earlier given longer expected delivery times. One in four said they will shop less in physical stores, though 19% still expect to buy more in stores.
There appears to be some retailer consolidation in purchasing behavior among 23%, so this should raise a red flag. This will likely favor Amazon and other mass merchants given the breadth of products and their holiday pricing. Lastly, the purchasing of sustainably-minded gifts is a factor for 10% and hopefully will gain interest in years to come.
Retailers have let shoppers know that inventory may be hard to come by, so shopping early may be the order of the day. Online shoppers plan to frontload their holiday shopping, with two in three starting by early November.
- Early November or before: 68%
- Cyber 5: 18%
- December: 10%
- Not sure: 4%
Based on our three-year findings, shopping patterns remain consistent. Despite all the discussion around early promotions and potential supply chain issues, it is not easy to change shopper behavior.
The combination of Black Friday and Cyber Monday drive online holiday shopping, as more than half of shoppers intend to shop on those two days. Other promotional holidays still make an impact, though.
- Black Friday: 58%
- Cyber Monday: 53%
- Thanksgiving weekend: 29%
- Free Shipping Day: 28%
- Day before Thanksgiving: 32%
- Thanksgiving: 20%
Shoppers may be looking for early bargains in hopes of getting desired selection and prices. The three-year trendline review (2022 vs. 2021 vs. 2020) shows when shoppers plan to shop online.
- Day before Thanksgiving: 32%/25%/15%
- Thanksgiving: 20%/23%/15%
- Black Friday: 58%/56%/47%
- Thanksgiving weekend: 29%/30%/30%
- Cyber Monday: 53%/54%/53%
- Free Shipping Day: 28%/26%/30%
Saving money tops the list of how shoppers select online retailers
Saving money is still top-of-mind for online shoppers, with free shipping and valuable promotions as the most popular ways. As we have seen over the years, free shipping always tops the list for 59% while competitive prices comes in at 52% among survey respondents. Free return shipping continues to play a role for 27% given its risk-free perception. Shoppers always appreciate valuable promotions (25%). Meanwhile, 11% noted that flexible payment options are important to them.
Logistics and an in-stock presence will be issues this holiday season. When making selections, 32% of shoppers plan to factor in delivery speed while 27% will look for in-stock/ready-to-ship products. Getting it right matters for 16% who will take into account previous shipping experiences with retailers.
Shoppers are always concerned about customer service, where flexibility in policies is preferred. 19% cited quality customer service while the flexibility of the overall return policy was on the list for 15%. Just 10% said they prefer the physical store presence where items can be returned.
Fundamentals always matter, including detailed product information (18%), product selection (10%) and peer reviews (7%), although these features pale in comparison to other issues, like free shipping.
It’s essential for retailers to get it right as shoppers have long memories; 22% alluding to past overall experiences as a reason for choosing a retailer. Retailers should also keep loyalty/rewards programs in mind, as they were a factor for 18% of surveyed shoppers.
Experiences shoppers expect to have over the 2022 holiday season
Knowing inventory availability across channels will be core to 2022 holiday behavior online and off. It tops the list of projected experiences, as 57% said they will check product availability online for delivery while 30% will do so at nearby stores. 18% of surveyed shoppers will also take advantage of same-day delivery while buy online and in-store pickup will be 27% and curbside pickup is expected among 17% of those surveyed.
Marketplaces will play an integral role this season as the majority of respondents will be making purchases via such means.
Shoppers plan to purchase gift cards this holiday season, both physical (29%) and virtual (15%). Shoppers will also be buying from consumer brands with expectations to do so among 18% of our online buyers. There continues to be interest among 11% of respondents to purchase experiences rather than products. Given the economic times, 11% expected to take advantage of buy-now-pay-later financing. Lastly, 11% of online shoppers plan to use wish lists usage to facilitate purchasing.
Saving money motivates shoppers to make holiday purchases online
62% of online shoppers say free shipping most motivates them to make a purchase while 27% of participants were inspired by perks, points or retailer loyalty rewards. Promotional emails also captured the shopper’s attention as they played a role for 21% of survey respondents. Meanwhile, immediate discounts for signup email/texts resonated with a segment of shoppers and were a factor for 20%.
Customer insights from reviews to referrals still drive purchasing, according to 31% of online shoppers, while referrals from friends/family were a lesser factor; 16% cited it.
Lastly, 10% of consumers said retargeting and direct mail/catalogs for 9%.
Amazon’s impact looms large
49% of online shoppers said they will make at least half of their holiday gift purchases on Amazon. Their expected share breakout is as follows:
- 50%+: 49% of consumers
- 25%-49%: 27% of consumers
- 1%-24%: 21% of consumers
- None: 3% of consumers
With this domination, online seller differentiation and strong execution will be important for growth.
Our theme of year-over-year consistency continues. When we look at 50%+ likely holiday gift purchasing at Amazon the trend was as follows: 2022 (49%), 2021 (52%) and 2020 (48%). It will be important to monitor Amazon growth as it relates to 2023 projections.
Digging deeper, most online shoppers will spend about the same with Amazon this holiday season (56%). Meanwhile, 27% will spend more, 13% will spend less, and 4% said they won’t spend on Amazon.
When it comes to Amazon, holiday gifting shopper sees little year-over-year shift in Amazon holiday gifting behavior. Behaviors are engrained as the three-year review suggests.
2022 vs. 2021 vs. 2020
- More: 27%/27%/26%
- Same: 56%/55%/54%
- Less: 13%/14%/13%
- No Amazon: 4%/4%/7%
10 recommendations for retailers
There is always time to make changes. Even if retailers don’t implement them all now, 2023 is on the horizon.
- Take advantage of shopper interest in early buying with inspiring products and compelling promotions.
- Remain hyper-vigilant in pricing and promotions, being creative in execution to capture consumer attention.
- As shoppers consolidate their purchasing, differentiate through selection and presentation to thrive.
- Evaluate the ways you can compete with Amazon, as it is always a necessary and worthwhile exercise.
- Assess how your promotions will be deployed throughout the season and be ready to adjust based on performance.
- Ensure your inventory is both transparent and accurate.
- Participate in marketplaces to foster growth.
- Review your free-shipping plans and be prepared to strategically deploy throughout the season.
- Ensure customer reviews are well-populated and presented.
- If you have a loyalty program, keep shoppers informed of its value and frequency incentives.
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