The holiday season can be an exciting time, full of events with family and friends one might not get to see as often. However, there is often some amount of stress accompanying the celebrations.
Many busy consumers become overwhelmed during the holiday season as they try to plan menus that accommodate a variety of guests, while staying within their budget. For 2023, inflation adds an additional hurdle.
According to New York-based consultancy Bain & Company, the forecasted nominal growth in US retail sales is the lowest this year since 2018 at 3%.
“Retailers are facing new challenges this year and are overcoming headwinds from higher interest rates amid increasing debt,” said Aaron Cheris, head of Bain & Company’s Americas Retail practice. “That being said, several tailwinds may boost holiday retail growth with prices remaining elevated as compared to last year, even as inflation slows. Retailers are continuing novel, targeted marketing approaches, using technologies like generative AI and livestreaming.”
“Savvy retailers will start early and lead with value messaging—both in terms of price and quality—employing positive commonalities to appeal to potentially cautious consumers this holiday season,” said Sarah Irizarry, associate partner in Bain & Company’s Retail practice. “Winners will continue to invest amid challenges and focus on new solutions that personalize their offerings and improve overall customer service.”
Bain suggests the following six tips for retailers preparing for the holiday season:
- Get an early lead—shopping starts earlier, and customers could run out of budget.
- Lead with value messages and strategic promotions to draw in cautious customers.
- Stress positive common values to bring customers holiday joy in tough time.
- Act fast on AI to personalize offerings and improve customer service.
- Use stores to support profitable online growth—shipping, returns, and trials.
- Put unit sales and profits above price increases—investors want healthy growth.
Bain’s 2023 Holiday Shopping Outlook offers an interactive digital infographic, which can be found online here.
This article is an excerpt from the October 2023 issue of Supermarket Perimeter. You can read the entire Seasonal Promotions feature and more in the digital edition here.