E-commerce payment integration: Tap, swipe, or click into new markets
Payment integration is an indispensable component of any commerce platform, serving as a catalyst for growth, customer satisfaction, and long-term stability.
Stores are filling with displays of holiday decorations and holiday-themed merchandise as retailers eagerly prepare for the annual shopping surge, but consumers may not be as excited.
Forecasts for 2023 holiday retail sales indicate slower sales growth as inflation continues to keep consumers wary of their spending.
Bain & Company expects US holiday retail sales to grow only 3% this year, the lowest since 2018.
According to Deloitte’s annual forecast, holiday retail sales this year will grow between 3.5% and 4.6%. That compares to last year’s 7.6% increase.
Holiday retail sales outlook for 2023
Deloitte estimates overall 2023 holiday sales will total between $1.54 trillion and $1.56 trillion between November 2023 to January 2024. Retail sales during the same period a year ago totaled $1.49 trillion, Deloitte said, citing the US Census Bureau.
Deloitte cited a a couple factors behind the lower growth projections. Cooling inflation “means the total value of retail sales will grow more slowly than last year,” Daniel Bachman, Deloitte’s U.S. economic forecaster, said in a prepared statement. Also, consumers have less money saved than during the pandemic, he said.
Despite the tepid overall growth projections, e-commerce sales will be a shiny spot for retailers.
Bain & Company said most of its projected growth of retail holiday sales will be generated by e-commerce and mail order sales rather than in-store.
Deloitte forecasts that e-commerce holiday sales will grow between 10.3% to 12.8% year-over-year, for an estimated total of $278 billion to $284 billion.
“This season e-commerce sales should continue to be strong as consumers search for the best deals online to maximize their wallets,” said Nick Handrinos, vice chair, Deloitte LLP, and U.S. retail, wholesale and distribution and consumer products leader.
Retailers who remain flexible and adapt to shifting consumer demand and behaviors will likely be poised for growth this holiday season, he added in his prepared statement.
The stats: Cautious consumers cut back on holiday spending
A survey of 1,000 US consumers by Celigo found that 80% expect to spend less this holiday season. Even upper-income consumers may be more inclined to save their money this holiday season, Bain & Company said.
While economists say a recession is less likely than it was earlier this year, consumers have plenty of reasons to remain uneasy about the economy and their finances.
In August, the Consumer Price Index rose 0.6% after increasing 0.2% in July, according to the US Bureau of Labor Statistics. The cost of gas and shelter were the biggest drivers.
Experts cite other pressures on consumer budgets, including the restart of student loan payments and soaring interest rates. As savings have gone down, consumer credit card debt reached a record high of $1 trillion, according to the Federal Reserve Bank of New York.
As they did last year, budget-conscious consumers will be on the hunt for holiday sales and starting their gift buying early.
77% of those surveyed by Celigo said they plan to prioritize value in their holiday purchases. Nearly 50% said they plan to start their holiday shopping by either this month or next, well before the traditional post-Thanksgiving, Black Friday kickoff.
AI for customer service: Faster fixes, happier agents
AI for customer service can improve the agent experience, speed resolutions, and boost customer satisfaction.
Surviving the season: Tips for retailers
Clearly, retailers have their work cut out for them in order to overcome these challenges as they head into the most critical season for retail sales.
Bain & Company suggests several steps retailers can take:
- Start early, or risk missing out as shoppers look for deals with their limited budgets
- Lead with value messaging and strategic promotions to attract thrifty shoppers
- Use AI to personalize offers and improve customer service
- Leverage stores to support online shipping and returns to boost e-commerce profitability
- Focus on unit sales and profits instead of price increases
Another issue retailers should pay attention to as they head into peak season: Potential supply chain issues due to drought issues impacting the Panama Canal.
Supply chain visibility is essential, so that retailers can quickly spot shipments at risk. Then they need the ability to make quick adjustments such as finding alternative transport or redirecting shipments.
By taking steps to build flexibility into their systems, retailers can be ready for whatever this holiday shopping season brings.
