It is no surprise that this year’s holiday season will look dramatically different than any other. The combination of inflation, supply chain issues and a multi-demic creates a unique environment, that for many, would predict multiple things:
- Customers are looking for a deal,
- Customers are shopping early, and
- Customers are shopping online.
Interestingly enough, only one of these is being predicted for the 2022 holiday season.
Customers are Shopping Online
First, it is best to look at some historical data. Previous sales data shows that from October to December 2016-2021 total sales are steadily increasing, as expected. Online sales are also increasing, but differently. It may be a surprise that during the 2020 holiday season, though it was a drastic increase, online sales made up only 7.4% of total retail sales. This fell to 6.9% of total holiday sales in 2021, which is understandable as a result of less restrictions from COVID-19 compared to the previous year.
Based on a study conducted by Leger and the RCC, customers are planning to spend less time browsing online, but the plan to spend the same amount online (37% of total spend) vs. in-store (63% of total spend). In 2021, customers expecting to spend 44% of their time researching in-store and 56% online. In 2022, these have flipped, with 55% of research being expected to be in-store and only 45% online. This illustrates that customers are expecting to return to brick-and-mortar stores this holiday season.
2022 is a very different environment than any other holiday season. Online sales are down -11.7% YOY (as of September 2022), and projections suggest that 2022 will end with a decrease regardless of the holiday season.
Closer to home, within the Downtown Yonge Business Improvement Association, this trend has been evident. Pedestrian traffic during the long weekend in October (Thanksgiving) not only surpassed the pandemic years, but 2019 as well.
Customers are Shopping Early
Based on a study preformed by Leger and the RCC, customers are also not changing any habits on when they are planning to shop. November remains the busiest month for holiday purchases, as it has been in the past.
Anecdotally, the JCWG team has visited various shopping centres across the Greater Toronto Area, with most not looking much busier than normal (see image of CF Eaton Centre in Toronto above). With customers who were surveyed saying they were planning to visit stores in-person this year, it seems that people may be waiting for some last minute, pre-Boxing Day sales.
Customers are Looking for a Deal
Based on the Leger/RCC study, the top three factors that customers are looking for are:
- Lower prices and discounts (52%)
- Holiday sales or promotions (40%)
- Free Shipping (37%)
This year, we are also expecting a decrease in overall spending during the holidays, up to -17%. This decrease does not necessarily mean that people will be buying less items/gifts, but possibly that people are expecting to see better pricing and plan to take advantage of these discounts.
October to December sales from 2016 to 2021 show an increase over this time, and the percentage of total sales increasing as well, as shown below:
JCWG will be releasing the totals for the 2022 holiday season in February, 2023, once all holiday sales data has been released. Subscribe to our newsletter to make sure you don’t miss this important update!