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Holiday Shopping in 2023 Will Be Different
Somehow, we’re already halfway through 2023, which means it’s time to start thinking about the holiday season. If the outlook for the remainder of the year, including the holiday shopping season, could be summed up in one word, that word would be “uncertainty.” We don’t know if we’ll still be experiencing high inflation, we don’t know if we’ll be hit by a recession before the end of the year, and we don’t know how consumer impressions about the economy will affect their holiday spending. Given this uncertainty, it's hard to make predictions about how much, or how little, to order for the coming holiday season.
The Fed has taken action to slow inflation by increasing interest rates, but that may have unintended consequences for holiday shopping. James Gagne, CEO of SEKO Logistics, a transport, logistics, and warehousing company, told CNBC that these rate hikes “could have a real negative impact as it relates to demand.”
Tim Scharwath, CEO of DHL Global Forwarding, expressed similar sentiments to CNBC. “If we foresee that inflation stays high and we have uncertainties, people are going to spend less and that impacts the overall absolute numbers and it’s probably going to be a lower peak season.”
In the face of inflation and smaller household budgets, shoppers will be looking for discounts this holiday season. Whether that search for the lowest price hits luxury or the sector remains fairly recession-proof remains to be seen. Economists have expressed concerns, however, that the surge in the luxury market has peaked. Saks Luxury Pulse Survey finds that 53% of respondents plan on spending the same or more on luxury in the coming months, but that number is down from 62% from an earlier survey.
Given these challenges, retailers should seek to provide shoppers with experiences worth paying for. Enhancing customer experience both in-store and online should be a priority. In-store apps that keep customers engaged and act as an extension of your sales team and inventory will be more useful than ever. It’s one thing to say to a customer, “we don’t have it in stock, but we can order it for you,” but it will be much more effective if you can say the same thing but show them exactly what you’re ordering.
The CNBC Supply Chain Survey reveals that 43% of retailers are decreasing their peak season orders from last year, with about a quarter of those reporting that they will order 15% less, a quarter ordering 11-15% less, and a quarter ordering 6-10% less inventory than last year. 71% are concerned that consumers will cut holiday spending as a result of inflation, with only 1% believing that customers will “trade up” and purchase a few more expensive items rather than several less expensive items.
Retailers putting off placing orders won’t help an already uncertain situation, the CNBC article notes, as bunches of late orders “could create a container surge and supply chain delays.” In this case, inventory management tools and apps, especially those designed specifically for jewelry industry suppliers, that can adjust quickly to changes in product demand and availability, will be invaluable in preparing for any surprises this season might throw your way.
Whether you’re a supplier or a retailer, you might find yourself short staffed this holiday season and in need of extra help from technology. On the other hand, given the possibility of a slower holiday, you might hold off on hiring holiday help. Any technological edge you can give yourself in navigating this job market will help immensely.