What to know about the 2022 holiday season

As we move towards the holiday season, many companies are preparing for a potential slowdown in business. Inflation, rising gas prices, changing consumer habits, and workforce challenges are just some of the obstacles that will impact sales as we close out 2022. The best way for your business to brace for turbulence is to keep an eye on market trends and expected disruptions. Read the latest insights and holiday shopping predictions and learn how they could impact your organization.

Inflation and gas prices

Businesses all over the US are experiencing the impact of inflation and rising gas prices, but this will likely become more prominent over the holiday season.

Production costs will continue to rise and the price of goods is seeing a double-digit increase compared to 2021 in many areas. This may be further exaggerated by supply-chain issues. 85% of toys are made in China, so if there are considerable shipping bottlenecks like we saw in 2021, demand for (and cost of) popular products will spike sharply.

First- and last-mile expenses are also rising, making order fulfillment for online businesses and distribution operations across entire industries more challenging. Some retailers have been charging for postal returns to mitigate losses, and more businesses could join this trend as gas prices keep climbing.

Changing consumer habits

The pandemic drove a change in spending habits that shows no sign of slowing down. Data from Deloitte forecasts growth in e-commerce holiday sales of up to 14.3% compared to 2021. This could push e-commerce sales to between $260 billion and $264 billion in total. This could have a huge impact on high-street sales as more consumers than ever opt for friction-free online spending.

Other research predicts that spending will start earlier than normal this year, with some reports saying people could start searching for deals as early as October. 61% of shoppers started early in 2021, up 10% from 2011. This may significantly impact retail sales in the run-up to the holidays, although there’s expected to be a drive to encourage shoppers to return to physical stores now that the pandemic is finally winding down.

Retailers can invest in expanding their online infrastructure ahead of the 2022 peak season by optimizing systems to deal with an increase in traffic and investing in AI for customer service and inventory management.

Brand switching

Brand switching driven by inflation and rising costs is gaining ground among consumers. More than 80% of people bought a different brand from what they usually would in summer 2021, and this trend may continue over the 2022 holiday shopping season.

Experts predict that consumers could put brand loyalty to one side in favor of cheaper and more hassle-free options like Amazon. Buying gifts and other products all in one place leads to savings on shipping and pickup costs. This will be encouraged further by attractive deals on Cyber Monday and other consumer events. 17% of shoppers aren’t sure if they’ll buy any gifts at all, implying that luxury brands may see a drop in sales as consumers become more price-conscious.

Talent shortages

Even with a shift towards online channels, sales are still made possible by employees. The nationwide talent shortage in manufacturing, distribution, and other key areas could present serious problems for retailers as they see an uptick in activity over the 2022 peak season. This is made even more difficult for employers as wage expectations change. The minimum wage workers are willing to agree to when accepting a job offer is now up 5.7% compared to this time last year, further impacting your organization’s bottom line during the 2022 holiday shopping season.

The best way to deal with employee shortages is to team up with a talent expert. At Adecco, we help businesses all over the US leverage temporary workers over the holiday season. Our massive talent database made it possible for a national e-commerce retailer to reach a fulfillment rate of 119% over peak periods like Black Friday. We did this by implementing an hours-guaranteed program for temp workers, making it more than worth their while to join our team of associates and guaranteeing our partner company the people they needed to handle a surge in orders.  

To learn more about how Adecco can help your organization deal with staffing shortages and other challenges this 2022 peak season, contact us today