The long-awaited holiday season is just around the corner. After some difficult years for the retail sector during the pandemic and the Russia-Ukraine war, the retail industry must now face cost-sensitive consumers during a cost-of-living crisis and inflation.
While retailers can’t enjoy the gift of an easy holiday season, we do see plenty of rising retail industry trends that you can potentially learn from to take hold of all the opportunities this season.
What are the recent trends in the retail industry?
Not every trend will suit every retailer. However, some are standouts this year for many businesses to push sales further and develop the customer experience.
Trends to watch this December are:
- Connecting with the community
- Immersive shopping experiences
- Price sensitive consumers
- Experiences and services
Let’s dive into each one and some examples of these trends being used right now in the retail industry.
1. Connecting with the community
More retailers are getting involved with the local community. Christmas may be a good time to show your local community some love and support. You could already have a suitable charity partner or organization you can rely on for community outreach.
For example, Aldi partners with Feeding America to donate essential supplies to reduce food insecurity and support families through natural disasters.
Retailers can also offer products that donate a portion of their profits to charity, such as this Christmas bauble from John Lewis.
2. Immersive shopping experiences
Immersive retail is the buzzword that isn’t going away. Shopify found that in 2022, 40% of brands invested in tech to enhance the customer’s in-store shopping experience.
Immersive shopping can involve touch screens, virtual reality (VR), sensory experiences, and other technologies to add another dimension to the experience.
Customers can book a pick-up online, visit in-store to get what they need, and spend time browsing in your store too.
Around 10% of all sales will be Click-and-Collect by 2025. For customers completing holiday shopping or exploring the sales, click-and-collect options could be the deciding reason they choose your store over another.
4. Price sensitive consumers
Spending growth is slowing as the economy settles down amid higher interest rates intended to reduce inflationJack Kleinhenz, National Retail Federation Chief Economist
Economic challenges mean customers have a tight leash on their spending, so many are less likely to splash out. But it does mean sales, offers, exclusive discounts, and loyal customer benefits can greatly appeal to consumer needs.
Price sensitive consumers are also price sensitive employees. For example, Starbucks recently announced its decision to raise the salary of its U.S retail workers by at least 3% from 2024.
When advertising your festive products and services, put any offers, deals and rewards front and center.
Find out more about your customers using geospatial data. Having a full report of aggregated data, such as location data, customer income, education level, and other details can help you build effective campaigns and strategies this holiday season.
5. Retail sustainability trends
Sustainability is a rising trend. Whether it be zero waste, carbon neutral, or other green labels more retailers are taking note.
One example this year is the retailer John Lewis. The company confirmed that all wrapping paper and crackers sold for 2023 would be 100% recyclable and glitter-free.
6. Experiences and services
NRF noted that year-on-year spending growth is currently driven by services, rather than goods bought at retail. Service retailers are defined as retail businesses that sell services or experiences to the customer, such as theaters, cinemas, restaurants, spas, etc.
Whether this spending growth is driven by consumers being more price sensitive or a shift in behavior, it’s never a bad idea to diversify what you offer customers.
Brick-and-mortar retailers can diversify income by offering experiences and services to customers, such as running workshops, running community events and groups, launching a product event, and so on.
Strategies for retail this December
To succeed this holiday season, retailers can use trends to align with customer needs and deploy certain strategies to stand out from the competition.
Retailers this holiday season should:
- Address customer concerns
- Offer item tracking
- Consider other payment methods
- Temporary workers
1. Address customer concerns
When a customer is looking at your website or products in person, retailers should address any hesitations before they are even voiced.
This can look like a clear returns policy, free trial, discount on a first order, and a reviews section. These strategies are the new standard for retail.
2. Item tracking
For e-commerce retailers, nearly 70% of consumers said the ability to track orders was one of their top three considerations when buying a product online.
While live tracking isn’t always expected or wanted, customers do like to stay updated on the delivery process.
4. Consider other payment options
Buy Now Pay Later (BNPL) options such as Klarna, ClearPay, etc are more popular than ever as they offer a zero-credit option for greater customer convenience.
According to a YouGov survey of British consumers, 42% think they’ll spend more than they should this festive season. Offers, discounts, and limited-time deals can all help customers make a final purchase decision as well as BNPL options for online retailers.
5. Temporary workers
Temporary workers have always been important to cover necessary open hours and operations during the holiday season.
A survey by the bank Barclays found more than four in five (8%) retailers anticipate relying on a temp workforce during this festive season.
From Black Friday Sales to the busy Christmas season to New Year’s, temporary workers are an essential part of any retail operation.
Retail trends from 2022
2022 was the year lockdowns across the world ended and businesses opened their doors fully, in many cases, for the first time in two years.
These years brought many trends to retail, some of which are sticking like glue and remain important to the industry including:
- Early bird shoppers: Back in 2020, Google noted 28% of people were planning their festive shopping early on in the season, some even 3-6 months earlier! To address this, putting up displays early, advertising your efforts on social media, and updating your website is crucial.
- Shifting channels to online: During the pandemic, many places shut their doors and customers looked to online shopping for their purchases. While there’s still a strong place for offline shopping, retailers need to evaluate their space and potential foot traffic to ensure the store is optimized.
It’s good to keep previous trends in mind as many apparel retailers can attest – trends have a habit of coming back in some fashion.
How do you stay up to date on retail trends?
There are a number of ways to stay up to date on retail trends such as:
- Following retail industry leaders on social media
- Reading newsletters
- Speaking to your customers by conducting surveys yourself
Finally, technology means you can now Implement AI-powered analytics to identify and predict foot traffic trends for the next 90 days.
Find out more about our foot traffic reporting system Almanac, using models developed by Stanford University PhD candidates at NeuralProphet.
Christmas Trends for Retail FAQs
What are seasonal trends in retail?
Seasonal trends mean how purchase patterns shift throughout the year as customers need changes. For example, sunscreen purchases increase in summer while Christmas decoration sales are higher in winter. Depending on the store, how these seasonal retail trends will affect you can vary.
What are global trends in retail?
Global retail is the process of selling goods and services around the world. A global trend is one that catches wind in every corner of the retail industry. Some examples are global technology trends such as chatbots to improve the customer experience online and the increase of smart screens within brick-and-mortar stores.