Lessons from the 2022 Holiday Shopping Season
Every holiday season is unique, and 2022 was no exception. With customer confidence near all-time lows — influenced by ongoing inflation and recession worries in the news — brands and retailers had a great deal to contend with as they executed their strategies.
Yet despite the macroeconomic environment, e-commerce sales still managed to grow last holiday season, though certainly more modestly than in previous years. While consumers may have been more cost-conscious, increased discounting and promotional activity fueled by high levels of inventory helped boost consumption.
As 2023 gets into full gear, we should look at the key trends and factors persisting and fueling growth into the next holiday season peak, which will arrive before we know it. Retailers and brands planning for upcoming quarters should remember these lessons from the 2022 holiday e-commerce shopping season:
1. Mobile secures equal footing
Mobile traffic and shopping has continued its steady climb. 2022 mobile traffic nearly equaled desktop web browsers, reaching 48% of all traffic. Though the growth may happen more slowly than in past years, mobile is now an essential path in consumers’ shopping journeys. Whether out and about or relaxed on the couch, consumers leverage mobile channels not only to convert, but also for inspiration and price comparisons. You need mobile site optimization — with great content and discovery tools — to convert customers effectively.
Further, SMS continues its rise as an effective marketing channel. According to Bloomreach’s Cyber Week data report, significantly more e-commerce brands implemented SMS messaging on Black Friday. This channel enables brands to meet consumers directly where they are and bypass the noise of the email inbox. And as conversational commerce continues to mature, more businesses will use SMS for building stronger customer relationships and serving customers in the apps we already rely on for communicating with friends and loved ones.
2. Retailers and brands need AI if they want to scale
AI is certainly not a new topic for retailers or brands, but many have held back in implementing AI to drive optimizations throughout the business. That is certainly true in personalizing and better serving the large group of digital-first customers gained during the pandemic. It is now clear that leveraging the automation AI can bring to the business is not just a “nice to have” — it’s a necessity.
This holiday season, we saw more brands leaning into AI to help scale efforts across e-commerce, from email campaigns to web content to product discovery. AI allowed them to reach millions of customers with personalized content and relevant experiences across every channel, driving conversion and average orders higher while delivering more relevant consumer experiences.
And while the hype around Generative AI — such as ChatGPT — is stealing headlines, those tools remain immature. Brands and retailers should focus on the basics by leveraging their customer interactions and using AI to drive core optimizations and build better, long-lasting customer relationships at scale.
3. Buy now, pay later has become ubiquitous
This holiday season saw a dramatic spike in “buy now, pay later.” This option likely reflects consumer credit creeping up to near all-time highs as pandemic stimulus has been spent and inflation continues eating into discretionary spending. And while the idea of layaway is not a new concept, it’s telling to see how consumers are using it today. It offers ease and convenience and — importantly for consumers — low borrowing costs.
Yet retailers see dramatically higher costs with “buy now, pay later,” which presents quite a challenge. While many consumers will keep relying on this purchase option, many retailers may be tempted to pull back to preserve margins or tie it into their private-label credit programs. Retailers should carefully consider their strategy and weigh the risks before deciding what changes to make to these programs this year.
Delivering a great customer experience across all channels proved more crucial than ever last holiday season and will remain true for the year ahead. We’ve left the 2022 holidays, but we shouldn’t ignore its learnings.
While creating experiences that resonate with and engage target audiences is important during the holiday season, customers shop — and expect a positive experience — all year long. The journey to a more productive and prosperous 2023 continues.
Brian Walker is Chief Strategy Officer at Bloomreach.