High inflation leads to consumption downgrade! How should sellers prepare for this year's peak season?

It is learned that according to foreign media reports, affected by inflation, the shopping behavior of American consumers during this year's holiday peak season will change. This year's holiday peak season, the US online consumer market is mixed.

Online spending in the U.S. is mixed: on the one hand, many shoppers plan to cut spending, turn to low-priced brands, and shop in advance to avoid another price increase during the holiday season. On the other hand, affected by the epidemic, consumers are enthusiastic about celebrating the holidays after two years of limited or reduced gatherings.

Consumer spending budgets are tight

According to a report from Salesforce, more than half (51%) of consumers plan to buy fewer holiday gifts this year.

In addition, a survey conducted by Opinium showed that more than a third (38%) of American adults expect to spend less during the holiday season this year, and about two-thirds (67%) said they have already reduced spending on non-essential items.

Many shoppers plan to make purchases during the back-to-school season, which will eat into their holiday budgets this year and cause families to cut back on holiday celebrations.

Consumers are more concerned about price

While last year consumers paid more attention to a brand’s “availability,” this year the focus will be on the price tag. Salesforce estimates that half of shoppers worldwide would buy something other than their “favorite” brand because of price.

Discounts and promotions will be a big factor in shoppers’ decisions about where to spend. According to a July CivicScience survey, 34% of U.S. adults ranked discounts and promotions as their top consideration, while another 21% said free shipping was also important.

Consumers’ search for the best prices is leading to a longer holiday season in 2022. Nearly a quarter (22%) of adults have already started holiday shopping to avoid future price increases.

What should retailers do?

Target CEO Brian Cornell said on a recent earnings call that while many families are experiencing financial difficulties, there is nothing to celebrate about the fact that they are still excited about celebrating the holidays, and that a large number of consumers will still take advantage of the peak season to splurge on high-end merchandise.

Retailers need to ensure that the price and quality of their products are very competitive, so that they can attract consumers with "short cash" on the one hand, and consumers with "rich cash" are also willing to buy from them on the other hand.

Merchants who can’t compete on price should add other aspects of value, such as offering same-day delivery or in-store pickup options, to provide shoppers with convenience.

Faced with a long holiday season, retailers should consider starting promotions early and launching seasonal products. If Amazon does launch a second "Prime Day" event this fall, it would be worthwhile for sellers to participate.

Editor ✎ Nicole/

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