With expected cutbacks of around $46 billion in holiday gift spending globally due to the cost-of-living crisis, a new report by ShipStation, Holiday Shopping Trends Report: Winning Customers Despite Uncertainty, examines how retail and ecommerce merchants can adapt and continue winning customers during peak season despite challenging trading conditions.
The research, conducted with independent economics research consultancy Retail Economics, contains data-driven insights from a sample of more than 8000 consumers across Australia, Canada, France, Germany, Italy, and Spain, UK and USA, and over 800 ecommerce merchants.
The Holiday Shopping Trends Report explores three key themes and identifies four consumer types, and their key behavioural differences that will likely impact spending patterns for holiday shopping in 2022.
The report also investigates which categories are likely to suffer most from consumer intentions to cut back on spending, and how different consumer types will impact sales performances throughout the ‘golden quarter’ (October to December).
Value for money top of mind as recessionary behaviours resurface
The cost-of-living crisis combined with pre-existing industry disruption weighs heavily on both retail brands and consumers leading into peak season.
In fact, according to the Holiday Shopping Trends Report, nine in 10 businesses expect to be negatively impacted by rising costs over this holiday season; while on the consumer side, three in five shoppers expect to cut back on non-food spending.
The report anticipates consumers to adopt recessionary behaviour. As a result, shoppers are likely to reconsider familiar channels, with price and value to become key drivers of change.
In response, businesses will have to put value for money at the heart of their proposition to attract customers and preserve loyalty.
Merchants will also need to become smarter in their strategic approaches heading into the holiday shopping season.
They will need to look at new ways to drive further efficiencies and find innovative solutions to reduce costs, such as reducing packet sizes.
In order to address this, re-assessing delivery propositions will likely be a key priority. Over a third (34.7 percent) of businesses surveyed are responding to the current climate by increasing delivery costs, while more than a quarter (26.2 percent) are extending delivery timeframes.
Delivery speed and cost remain most important conversion factors
The final stages of the supply chain have seen consumer expectations for cheap and speedy delivery become normalised.
Research from ShipStation’s Holiday Shopping Trends Report shows that delivery cost and speed remain the two most important conversion factors for online shoppers.
In fact, 32 percent of Australian consumers and an average of 30 percent of global consumers consider cost of delivery the most important factor when purchasing from a merchant, followed by speed of delivery (20.8 percent), convenience (18.7 percent), visibility (14.5 percent), and carbon footprint of the delivery (10.4 percent).
According to the report, consumers are much more likely to accept delivery charges if they are positioned as ‘services’.
Businesses can enhance the delivery experience by offering timed delivery slots (dynamic pricing), accepting returns, removing old products for disposal, and offering supplementary services, particularly over the holiday period.
ShipStation helps you streamline your order fulfilment by connecting with all your channels, carriers, and platforms. ShipStation also enables you to optimise workflows and reduce shipping errors with custom automation such as automation rules and order tags.
Build flexibility into your supply chain
Almost 25 percent of businesses surveyed in the report stated that they started planning for the holiday season ahead of last year, reflecting greater uncertainty and supply chain issues.
Improved strategies are likely to involve using shorter, more flexible supply chains, better equipped to deal with supply shocks.
Additionally, retailers who continually explore potential partnerships will be better placed to cope with holiday demand as they ‘piggyback’ off existing infrastructure. This could come in many forms, from automated warehouses to cloud computing.
The report indicates that partnerships with agile third-party suppliers and returns management companies will also become important for many businesses to enhance online capabilities in a rapidly evolving market at this time.
ShipStation also offers discounted postage rates up to 58 percent off retail rates with Australia’s top couriers including Sendle, CouriersPlease, and Aramex. This enables helping your business to run smoothly by aggregating your orders from across multiple platforms and carriers.
Within Australia, sellers can link their profiles in ShipStation to marketplaces like Amazon or eBay to receive orders and initiate returns. The entire process is automated, monitored, and easy to process.
ShipStation’s multiple-carrier shipping options also allows you to switch between carriers as and when needed, to get around potential delivery bottlenecks during peak season not only nationally, but also globally.
Preparing for disruption – where to from here?
Heading into the peak season, further disruption is expected. Businesses will continue to grapple with multiple challenges, and as such, they will need to work more diligently to shore up balance sheets and to reap maximum benefits in the final quarter.
By giving your business the flexibility to calculate shipping rates, access discounted shipping rates, and switch carriers using ShipStation, you give yourself the best chance possible to meet delivery deadlines and customer expectations this peak season.
Key insights presented within ShipStation’s Holiday Shopping Trends Report can inform, and potentially help improve, retail strategies to address current trading conditions for this holiday season and beyond.
To request your copy of ShipStation’s Holiday Shopping Trends Report: Winning Customers Despite Uncertainty click here.