Consumers Start Holiday Shopping Early, But High Prices On Essentials Drives Cutbacks

It’s not even Halloween yet, but consumers already have Christmas on the brain. They’re concerned about how prices of essentials will affect their budgets. In a survey by ESW, 61% said they’ll spend more than $600 this holiday season, compared to 48% last year. Of the people who are spending less, about 47% said the high price of food and fuel will lead them to reduce spending.

“Even though global inflation is coming down, many consumers are still feeling stretched due to high essentials costs,” said Martim Avillez Oliveira, chief revenue officer of ESW, a leader in direct to consumer ecommerce.

According to the survey, 37% of consumers have started their shopping journeys. As expected, Amazon Prime Deal Days and Black Friday are expected to be the biggest deal days of the season, with Cyber Monday coming in third place.

“Black Friday is where consumers plan to spend more money, and focus on deals and value,” said Oliveira. “We think global uncertainty isn’t healthy for the economy. We’re seeing that consumers will spend more, even though price and value was top of mind.”

From an intent perspective, consumers will spend more this holiday season, said Oliveira. Online will continue to grow, which means there are additional opportunities for online retailers to capture market share.

AI is going to be everywhere from physical to digital channels, smoothing store efficiencies and curating online experiences for shoppers. ESW found that 43% of consumers will shop more online.

“Retailers will have to make sure they have different promotions and loyalty schemes,” Oliveira said. “It’s critical to understand who your customer is. Free shipping is now table stakes. In addition to free shipping, free returns are popular. We’ll see free returns and other promotional activity like gifts-with-purchase and product bundles that consumers will expect from their preferred brands.”

ESW unlocks the local DTC channel for retailers. “If you’re a brand and want to capture or trial your product to international audiences, ESW acts as a merchant of record,” Oliveira said. “The brand can shift any liabilities and compliance requirements to the merchant of record [ESW].

Shopping cuts across demographic lines. For example, 51% of all consumers said they won’t use TikTok for shopping, however, when broken down by age, 65% of millennials and Gen Z combined said they’ll use TikTok for inspiration.

What categories will be popular? According to Oliveira, beauty will resonate with consumers, and “private label will be able to stand out this year and gain more market share just because of the sensitivity and how price-conscious shoppers will be this season.”

In addition to free shipping, Oliveira sees omnichannel as table stakes this holiday season. “That’s a seamless commerce experience,”he said. “”For retailers, finding their most cost-effective routes to get their goods to the consumer will be important. And making sure they plan their inventory and their pools of stock according to where the demand lives, both domesticaally and internationally. From our perspective localizing inventory, making sure you have, for example, the right product, the right sizes and the right promotions, will be key.”