6 Ways Retail Will Look Different This Sales Season
Amid a pandemic, war and economic turmoil, we’re living in unique times. Consumers are being hit by the rising cost of living, while businesses are navigating supply chain delays, shipping issues, and rising costs of materials and commercial rent.
But it’s not all bad news.
In Australia, 34 per cent of shoppers are expected to spend more than they did in 2021.
That said, 2022’s unique circumstances set the stage for a unique sale season in many ways. Here, experts weigh in on the current retail landscape – and share how merchants can adapt and thrive this holiday season.
1. Christmas will come early
With inflation rising, budget-conscious shoppers are likely to be keen to get in early to beat the crowds and avoid price hikes and shipping delays. This means merchants need to be well-prepped for the season in October, if not before – read our small business checklist for the sales season here.
While Black Friday falls on November 25 this year, many businesses are rolling out sales earlier and earlier, even in October. This pull-forward strategy might help retailers stand out from the crowd. Of course, if you go too early and you’ll miss out on shoppers who are holding out for a better deal.
The secret may be “leaking deals” through your EDMs and social media in October, teasing customers to drive excitement for your November sales, and even doing the odd flash sale on a particular product or line. Plus, keeping an eye on when competitors go on sale.
With inflation rising, budget-conscious shoppers are likely to be keen to get in early.
2. Shoppers are ‘trading down’
As inflation bites, shoppers will start to see their spending power falter. “Retailers will have to work harder to show both the quality and value of their goods,” says Helen Dickinson, chief executive of the British Retail Consortium. “Many households are already finding themselves ‘trading down’ – buying the cheaper ranges of goods – meaning that retailers must either show the value of higher-end brands or expand their existing affordable ranges.”
The BFCM and pre-Christmas period is an opportunity for merchants to cater to cautious or cash-strapped shoppers with slashed prices.
But between sale days, not every business can afford to be the cheapest on the market, especially when competing against retail giants. One way to retain customers in this landscape without constant discounting is to look to offering exclusive products. “Offering exclusive products makes price comparisons difficult,” explains Marie Driscoll, Coresight Researcher. “Exclusives, limited editions and collaborations with exciting brands drive shopper engagement and traffic.” Another option is a free gift with purchase [link]
3. Shoppers loyalties are changing
Research suggests that, worldwide, we’re in the midst of a “loyalty shake-up” with more consumers switching to different brands in 2022 than in 2021 or 2002, according to McKinsey research.
Hold on to your high-value customers by granting them early access to sales events or special discount codes – and think about how to take advantage of customers’ willingness to try new brands. How can you encourage consumers who haven’t shopped with you before to purchase with you for the first time? Make sure the path to purchase is as smooth as possible – that your website is fast, customer service is on hand, and that you offer a buy now pay later service like Clearpay.
“Retailers will have to work harder to show both the quality and value of their goods."
4. Consumers are craving positivity
A few years ago, a sale banner or discount email might have been enough to land a transaction, but customer behaviour and desires have changed. Today’s financially squeezed shoppers need more – including a reason to feel good.
“If you go right back to why it is that people shop, it’s never just about getting a product; it’s the way that it feels when they [shop],” says retail expert Ingrid Maynard, director of The Sales Dr.
“How do we make sure that at every step along the way, however [customers] choose to purchase, they have a positive experience? This year, in particular, it’s about linking spending money [with positivity], instead of triggering stress.”
Consider how to communicate the benefits of your products (via signage, social media, EDMs). Value is an obvious one, but think beyond this – for example, how will shopping in your sales make your customers’ lives easier? Can they tick off their Christmas list early? Enjoy free or fast shipping? Or feel less overwhelmed as December gets underway?
Bob Phipps, a US-based retail educational specialist who helps businesses better understand customer behaviour, emphasises that this year, retailers shouldn’t be too pushy with their sales. Cramming customers’ inboxes with discounts and coupons throughout the holiday season could be overwhelming for shoppers, plus it teaches them to always wait for a better deal.
5. ‘Wow experiences’ will attract shoppers and drive sales
Online retail has been growing consistently for more than a decade, but it was the pandemic-induced lockdowns of 2020 that saw the explosion of e-commerce.
The upshot is that brick-and-mortar shops have their work cut out for them and will need to create environments and experiences that customers want to try to lure them off the sofa and into stores.
“With the COVID scare abating, we’ve seen consumers returning to stores showing a pent-up demand for the social side of shopping, which includes in-store events as well as occasion-driven promotional activity,” says Driscoll, who recommends creating a “festival-like” atmosphere around BFCM sales.
In-store offerings to entice and delight shoppers include access to experts in-store (such as brand founders or influencers); free product demonstrations (especially for beauty products); gift-wrapping facilities; personalisation for leather goods; and frictionless pay, including the option to buy now and pay later.
"We’ve seen consumers returning to stores showing a pent-up demand for the social side of shopping."
6. Customers will expect multiple delivery and return options
Whether your business is online, bricks-and-mortar or both, offering a range of delivery and collection options will be essential this year. Click-and-collect, for example, was normalised during pandemic lockdowns, and is now widely expected by shoppers (especially those who leave their shopping to the last moment).
Driscoll believes that businesses should provide a “consumer-centric omnichannel strategy” whereby customers can receive their orders in multiple ways. Examples include BOPIS (buy online, pickup in-store); kerbside pickup; and buy online and return in-store.
Another option is the ‘find in store’ function, where online shoppers can check stock levels for a particular product online, and then go to a store and view it or try it on in person.
Each of these methods creates a “crossover experience between online and in-store”, Maynard says, not only making the customer’s life easier, but reducing shipping costs, minimising online returns, increasing foot traffic and driving up basket size. According to the International Council of Shopping Centers, more than half of adult shoppers use click-and-collect, with 67 per cent of them adding additional items to their online trolley when they know they can pick them up immediately.
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