What the Holiday Season Told Us About How Shopping Habits Will Change in 2023
The 2022 shopping season, including coveted holiday sales, proved to be anything but typical for shoppers and retailers alike. Issues with rising inflation and tighter budgets, coupled with continued shipping challenges, gave way to new and interesting retail trends.
Data from Quantum Metric shows that providing value at every step in the digital experience is more important than ever. As consumers scrutinize where and when to spend their dollars this year, here are a few ways you can create a better customer experience in 2023.
Make the Return Process Part of Your Customer Experience Strategy
Customer returns are spiking and reaching unprecedented levels. According to the National Retail Federation, retail sales during the 2021 holiday season reached a total of $887 billion. On average, retailers expect 17.8 percent, or $158 billion, of merchandise sold during the holiday season to be returned. For retailers, this spells trouble for their bottom line.
Returns are the biggest line item as retailers look at budget cuts. Interestingly enough, nearly 70 percent of shoppers avoid retailers that don't offer free returns, so charging for them could actually hurt sales in the long run.
So what can retailers do to keep returns from impacting their profits?
Factor returns into your growth strategy and create a return policy that's both efficient for the business and good for the customer. Simple ways to do this include offering customers a smaller refund to keep their purchase, asking them to return it in person at a physical location, or returning multiple items at once.
Find the Experience Gaps Within Your Mobile Journey
Data shows most customers are not only browsing on mobile but checking out on their phones, too. Mobile accounted for 60 percent of last year’s Black Friday sales, with its overall conversion rate growing 7 percent year-over-year (YoY), while desktop saw a 9 percent YoY decline.
With mobile becoming the consumer's preferred shopping channel, a mobile-first approach is now more critical than ever. Cumbersome checkout processes drive consumers away and cost businesses revenue. To create a seamless experience, take a deep dive into the customer journey to understand the mobile checkout process from the shopper's point of view and see what needs improvement.
For example, a frustrating experience for consumers is being asked to manually upload or re-enter their billing information — this is especially true on mobile. To avoid this, make it easy for shoppers to build a customer profile so they can save their information and checkout preferences.
Build for Bulk Shopping
Another interesting trend has emerged in the last couple of years: bulk shopping. Thirty-seven percent of consumers are pre-planning and buying all their items at once or "in bulk." And this isn't limited to groceries — consumers are buying multiples of the same item, such as clothes.
The trend continued into 2022’s Black Friday sales, with average order values for November seeing a 50 percent increase YoY. The average consumer spent $259 each time they hit the checkout button on Black Friday and $213 on Cyber Monday, compared to just $131 on Black Friday and $126 on Cyber Monday in 2021.
How did this trend come about? One possible explanation is that consumers are buying in bulk because they want to see or try on items in person before committing to a purchase. After deciding which one they like best, they return the rest of the order.
For retailers, this is an opportunity to incentivize customers to keep more items. Tap into software tools like augmented reality for home decor, virtual try-on for clothing, or get people to buy the "right" amount of goods in order to cut down on returns.
And if this trend persists, making the return process seamless will lead to happier customers and less margin erosion on shipping costs.
Doing More With Less Has Never Been More Important for Retailers
While the shifting economy and holiday season played a role in shaping consumer buying behavior, the trends we saw in 2022 will stick beyond the new year, and efficiency is the name of the game for the retail industry.
Consider: What are the less obvious ways to save and cut costs without cutting corners? Focusing on the digital experience and using technology to shed insights into the customer journey will make doing more with less easier for retailers.
Elissa Quinby is senior director of retail insights at Quantum Metric, the pioneer in continuous product design.
Elissa Quinby is senior director of retail insights at Quantum Metric. As a go-to-market and industry lead, Elissa provides expertise that supports retailers ability to optimize the digital customer experience. Prior to joining Quantum Metric, Elissa spent seven years with Amazon Retail holding roles across multiple verticals and various functions.