It might seem like this year’s holiday season is still miles away while we’re still in peak sunshine and shorts weather, but it’s never too early to start preparing for this major sales event. The earlier you plan things like marketing strategies, inventory levels, and prepare resources according to existing trends, the easier it will be for you to coast through the holiday season.
This blog post will give you some tips on what to expect in the 2023 holiday season, what we can learn from last year, and some tips and tricks on how to thrive this year.
2022 Holiday Season Retrospective
Looking at previous years’ e-commerce sales isn’t the only way to predict what’s to come, but it’s a good indicator of what trends might continue to grow. Here are a few numbers you should know following the 2022 holiday sales season:
- According to Mastercard, 2022 saw more spending than previous years. Online sales increased by 10.6% and e-commerce sales accounted for 21.6% of total retail sales.
- Shoppers spent $211.7 billion on e-commerce last holiday season, resulting in a 3.5% increase in sales from 2021.
- Cyber Five sales also grew 4% YoY, also seeing a record number of shoppers online and in stores over these five days.
- The categories that saw the most significant growth in online sales included toys, video games, and apparel/accessories.
While it’s impossible to accurately predict if the 2023 holiday season will trend the same way, it’s safe to assume that this year’s e-commerce spending around the Cyber Five and the rest of the season will continue to increase. That said, part of being prepared for the upcoming holiday sales is also being aware of current trends in retail and e-commerce so that you can prepare your strategies accordingly.
2023 e-commerce Challenges to Be Aware of
With inflation down and a well-performing stock market, many companies are optimistic about the outlook for the upcoming holiday season. Still, there are some experts who are still raising the alarm that consumers could continue to cut back on holiday spending this year, too.
Understandably, some of last year’s concerns still seem to be apparent in the e-commerce space this year. Let’s have a look at some challenges facing retail businesses this year:
1. Inventory concerns
Like last year’s issue of excess inventory, this year businesses are trying to be cautious to avoid the same mistakes. As there is still inventory build-up from previous seasons, 43% of companies are actually ordering less for this year’s holiday season.
Inventory remains a top concern for industries like footwear and apparel, which often deal with more products than other industries. Items that are out of season and still sit on shelves after peak shopping periods pose a problem since it’s more difficult to move those products afterward, leading to more cautious ordering this year.
2. Spending cut-back due to inflation
Even with inflation somewhat stabilizing since last year, businesses are still expecting that consumers will cut down on spending. According to a survey by CNBC, 71% of businesses think that customers will spend less this holiday season due to inflation.
In order to succeed this holiday season, it’s important for brands to keep this in mind and adjust their marketing strategies accordingly. In the same survey, 67% of respondents said they expect shoppers will be looking for discounts this holiday season.
3. Consumers might be shifting their behaviors
According to Saks CEO, Marc Metrick, luxury spending is peaking and we’re beginning to see a pull-back in this space. Still, shoppers who often go for luxury items aren’t likely to trade them off for mid-range items but rather simply buy less. That said, even among luxury shoppers, consumers are still more likely to shop when there are discounts.
On the other hand, 77% of consumers are focusing on mid-price point items this holiday season, as well as 52% on promotional items, showing that most shoppers are still going to be on the lookout for deals. This presents a good opportunity for businesses to use bloated inventory to hook in shoppers with steep promotions.
6 Tips to Prepare Your Business for the 2023 Holiday Season
Given the forecasted trends in holiday spending this year, how should you prepare your business accordingly? We’ve got some tips for you to start implementing as early as Q3 so that you can hit the ground running this year.
1. Prepare your promotions
As shoppers are going to be searching for good deals this holiday season, preparing your promotions in advance will keep you ahead of the game. Consider what promotions you want to offer, such as discounts, gifts with purchase, or loyalty program-specific sales. This way, you can prepare your inventory accordingly and make sure you order the right amount of products.
2. Take stock of your inventory
Speaking of inventory, if you haven’t already, now is the time to take stock of what’s already on your shelves. If there are still items from the previous season that need to be moved, start pushing those in holiday promotions. Keep in mind how much space you have to store inventory as well before ordering more.
3. Get your website ready
Start updating your website to prepare for the holiday rush. This can mean improving the checkout process, making sure your site is optimized for mobile shopping, or regularly updating your blog to improve your SEO ranking before the holiday season. A smooth online shopping and checkout experience will make it easier for customers to complete a purchase.
4. Understand your 2022 sales trends
Take a look at last year’s numbers to figure out what items sold the best and the earliest. Based on those trends, try and recreate the same scenario this year, either by rebranding the popular item, using a similar marketing strategy, or creating hype around a certain product or collection ahead of the holiday season.
5. Boost customer service now
Customer service teams are essential in guiding shoppers through the holiday season. Whether it’s to inquire about shipping times, returns, exchanges, or to consult on sizing, creating a smooth customer service experience can improve sales. Make sure your customer service team is trained and ready before the holidays, making it one less thing to worry about in peak season.
6. Consider other sales channels to increase sales
An omnichannel shopping experience can not only help you put your brand in front of new audiences, therefore increasing sales, but can also be a viable way to clear out excess inventory both before and during the holidays. Partnering with retailers or marketplaces helps you increase your sales channels, giving you more avenues for profits throughout the holidays.