ICSC forecasts 6.7 percent increase in October-December sales as consumers plan to spend even in the face of inflation
Shoppers expect to increase their spending in the 2022 holiday season by 6.7 percent, driven by an increased focus on deals and promotions, an earlier start to the holiday season, and inflation, according to ICSC’s Annual Holiday Shopping Intentions Survey. ICSC is also forecasting an increase of 9.9 percent on dining, bringing the total spending for the season to $1.56 trillion.
The survey also found that 90 percent of adults intend to make holiday-related purchases this year. Overall, 75 percent of shoppers noted that they plan to start earlier, identifying product availability (48 percent) and early deals and promotions (43 percent) among the primary drivers for their decision, with the top three gift categories being gift cards (62 percent), apparel/accessories (57 percent), and toys/games (50 percent).
The vast majority (89 percent) of consumers said inflation would impact their holiday purchases; those shoppers noted that they would buy brands on sale or promotion (42 percent), shop at retailers that generally sell lower-price goods (37 percent) or do more research online than usual to find better deals (32 percent) in response. Inflation was also the most common reason consumers cited for spending more this season, with 40 percent identifying it as a key driver, ahead of wanting to go above for friends and family (25 percent) and planning bigger celebrations (20 percent).
“Shoppers are continuing to spend despite inflation and economic headwinds, and while higher prices will drive some of the increase in holiday spending this year, overall retailers are poised for a successful holiday season,” said Tom McGee, President and CEO of ICSC. “Consumers are particularly interested in deals and promotions, and retailers should make the most of deal events and other milestones this holiday season.”
Consumers increasingly anticipate retailers will offer early deals and promotions, as 73 percent of shoppers expect retailers to begin offering “Black-Friday-like” deals earlier in the fall. Relatedly, 65 percent intend to spend significantly more time looking for promotions, and 60 percent are willing to buy excess inventory to get a deal, potentially offering a respite as consumers worry over higher prices.
The survey found that consumers are increasingly embracing all channels to meet their needs and get the gifts they want at competitive prices. Ninety-four percent of holiday shoppers will make both an in-store purchase and an online purchase with a retailer; 220 million people will take advantage of omnichannel shopping overall.
Shipping and product availability are also significant for consumers: Fifty-seven percent of shoppers intend to buy from brick-and-mortar retailers to pick up items themselves and avoid shipping delays and fees, a 17-point increase from 2021. Similarly, 67 percent of shoppers think free shipping is important, and a majority are willing to wait longer for delivery (66 percent) or spend more money (59 percent) to get free shipping. Despite these concerns, 69 percent noted that they will be patient and understanding this year about online holiday orders taking longer to arrive.
“While we foresee fewer supply chain issues than last year, consumers are concerned about the ability to get their gifts on time and for a good price,” said McGee. “It’s clear they see click-and-collect and physical retail as a way to ensure they get the gifts they need conveniently and on time. Retailers should continue to keep convenience top of mind as they plan for the holiday season.”