With merchants facing spiraling costs and consumers under the greatest pressure on discretionary income in recent memory, what will holiday sales look like this year?

With roughly $46 billion in expected reductions in holiday gift spending worldwide due to the cost of living crisis, a new report from ShipStation, Holiday Shopping Trends Report: Winning Customers Despite Uncertaintyexamines how retail and e-commerce merchants can adapt and continue to win customers during peak season despite challenging business conditions.

The research, conducted with independent economic research consultancy Retail Economics, contains insights based on data from a sample of over 8,000 consumers in Australia, Canada, France, Germany, Italy, Spain, in the UK and US, and over 800 e-commerce merchants.

The Holiday Shopping Trends Report explores three key themes and identifies four consumer types and their key behavioral differences that are likely to impact holiday shopping spending habits in 2022.

The report also examines which categories are likely to suffer the most from consumer intentions to cut spending, and how different types of consumers will affect sales performance throughout the “golden quarter” (October through December).

Value for money is a priority as recessionary behaviors resurface

The cost of living crisis, combined with pre-existing industry disruptions, is weighing heavily on retail brands and consumers ahead of peak season.

Indeed, according to Holiday Shopping Trends Report, nine out of 10 companies expect to be negatively affected by rising costs this holiday season; while on the consumer side, three out of five shoppers expect to cut non-food spending.

The report predicts that consumers will adopt recessionary behavior. As a result, buyers are likely to reconsider familiar channels, with price and value becoming key drivers of change.

In response, companies will need to put value for money at the heart of their proposition to attract customers and retain them.

Merchants will also need to become smarter in their strategic approaches as the holiday shopping season approaches.

They will have to look for new ways to improve their efficiency and find innovative solutions to reduce costs, such as reducing the size of the packets.

In order to resolve this issue, re-evaluation of delivery proposals will likely be a key priority. Over a third (34.7%) of businesses surveyed are reacting to the current climate by increasing delivery costs, while over a quarter (26.2%) are extending delivery times.

Speed ​​and cost of delivery remain the most important conversion factors

The later stages of the supply chain have seen consumer expectations for cheap and fast delivery normalize.

ShipStation Search Holiday Shopping Trends Report shows that cost and speed of delivery remain the two most important conversion factors for online shoppers.

In fact, 32% of Australian consumers and an average of 30% of global consumers consider the cost of delivery to be the most important factor when buying from a merchant, followed by speed of delivery (20.8% ), convenience (18.7%), visibility (14.5%). percent), and the carbon footprint of delivery (10.4 percent).

According to the report, consumers are much more likely to accept delivery charges if they are positioned as “services”.

Businesses can improve the delivery experience by offering delivery time slots (dynamic pricing), accepting returns, removing old products for disposal, and offering additional services, especially during the holiday season.

ShipStation helps you streamline your order fulfillment by connecting to all your channels, carriers, and platforms. ShipStation also lets you optimize workflows and reduce shipping errors with custom automation like automation rules and command tags.

Add flexibility to your supply chain

Nearly 25% of businesses surveyed in the report said they started planning for the holiday season before last year, reflecting greater uncertainty and supply chain issues.

Improved strategies will likely involve the use of shorter and more flexible supply chains that are better equipped to deal with supply shocks.

Additionally, retailers that continuously explore potential partnerships will be better positioned to meet holiday demand as they leverage existing infrastructure. This could take many forms, from automated warehouses to cloud computing.

The report indicates that partnerships with agile third-party vendors and returns management companies will also become important for many businesses to improve online capabilities in today’s rapidly changing marketplace.

ShipStation also offers reduced postage rates up to 58% off retail rates with Australia’s top couriers including Sendle, CouriersPlease and Aramex. This helps to help your business run smoothly by consolidating your orders from multiple platforms and carriers.

In Australia, sellers can link their profiles in ShipStation to marketplaces like Amazon or eBay to receive orders and initiate returns. The whole process is automated, monitored and easy to deal with.

ShipStation’s multi-carrier shipping options also allows you to switch between carriers as needed, to circumvent potential delivery bottlenecks during peak season, not only domestically, but globally as well.

Preparing for disruption – where are we?

As the high season approaches, further disruptions are expected. Companies will continue to face multiple challenges and as such will need to work more diligently to shore up their balance sheets and reap the maximum benefits in the final quarter.

By giving your business the ability to calculate shipping rates, access discounted shipping rates, and change carriers using ShipStation, you give yourself the best chance of meeting on-time delivery and customer expectations in this high season.

Key information presented in ShipStation Holiday Shopping Trends Report can inform, and potentially help improve, retail strategies to deal with current business conditions for this holiday season and beyond.

To request your copy of ShipStation’s Holiday Shopping Trends Report: Winning Customers Despite Uncertainty Click here.