NEW YORK--(BUSINESS WIRE)--Inflation and other economic concerns will likely shape consumer shopping patterns during the 2022 holiday season in the U.S., with AlixPartners, the global consulting firm, today releasing a projection for just a 4.0% to 7.0% increase in sales over last year’s season—which at the current inflation rate of 8.3% means retailers would see a decrease in real sales.
The firm today also released a survey of more than 1,000 American consumers, which found that 30% plan to spend less this year than last (while only 17% plan to spend more), that 39% plan to buy at least half their purchases on sale and that 40% plan to do the majority of their shopping online (which is up 10 percentage points from a similar AlixPartners survey in pre-pandemic 2019).
“The watchwords for retailers this holiday season will be ‘affordability’ and ‘digital,’” said Joel Bines, global co-head of the retail practice at AlixPartners and author of the McGraw Hill book The Metail Economy. “What we’ve dubbed as today’s ‘me-centric’ consumer—a consumer who holds all the power—is right now not only empowered but also worried—worried about inflation and worried about recession. As a result, consumers will be holding out for deals this year, even as retailers themselves struggle with their own inflation and with massive inventories.”
The AlixPartners survey also found that 40% of consumers plan to buy more affordable brands this year due to inflation impacting prices, and that more shoppers plan to wait this year to start their holiday shopping: Only 46% said they plan to start holiday shopping before Halloween (October 31), down 7 percentage points from a similar AlixPartners survey last year.
Overall, 59% of those surveyed said they think the economy is doing worse this year than a year ago, and that 37% expect the economy to be worse than today in 2023. Meanwhile, 39% of lower-income consumers—those with household incomes of $45,000 or under—said they plan to spend less this holiday season.
And in yet another indication of consumers’ growing comfort today with all-things-digital in retail, the survey also found that only 56% of holiday shoppers plan to visit a physical store to browse merchandise this season, down from 57% who said they would in AlixPartners’ survey last year (and down from 80% in the firm’s survey in 2018).
“In today’s new world, consumers are demanding that even traditional retailers be ‘websites with stores,’ not ‘stores with websites,’” said David Bassuk, global co-head of the retail practice at AlixPartners. “That’s why it’s critical that retailers of all types embrace what we call ‘digital-first retail.’ Most retailers have yet to crack the code on sustained omnichannel profitability, but those hoping to thrive in this new world must take a completely new perspective into their operating model—including regarding processes, organization and technology.”
“Retailers today are on a roller-coaster, with little visibility into what’s coming next—from consumers or from the economy,” said Alexa Driansky, a director in the retail practice at AlixPartners and one of the contributors to this year’s forecast and survey. “The best things retailers can do to ensure their profits aren’t scrambled at the end of the year is to put customer insights quickly into action, ensure tight inventories, optimize pricing and focus on cost control.”
The 2022 AlixPartners US Retail Holiday-Sales Forecast is based on proprietary AlixPartners methodology and was first instituted in 2012. The period it encompasses is October 1 through December 31. Its numbers are seasonally adjusted, and it covers core retail sales, which exclude motor vehicles, fuel, and restaurants and drinking establishments.
The 2022 AlixPartners US Retail Holiday-Outlook Survey polled 1,021 consumers in the United States ages 18 and older September 7-9, 2022.
AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms and others. Founded in 1981, AlixPartners is headquartered in New York, and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.