Does the early bird catch the Christmas shopper? Is the last-minute shopper from a bygone era? With Black Friday and Cyber Monday happening in early November the answer is likely to be yes.
However, the big question is how the current economic uncertainty will impact shoppers. According to the 2022 Deloitte Retailers Holiday Survey, just 67% of retailers expect sales over the Christmas period will increase, down from 80% last year.
The survey found that retailers are cautiously optimistic that consumers are ready to embrace holiday spending, although 43% predict margin growth will be flat, while expectations of online sales of more than 10% have lowered, the first time online sales were expected to fall since 2018.
The outlook for 2023 is also showing signs of pessimism with 58% of retailers predicting consumer confidence will deteriorate next year.
Other survey findings revealed that fewer retailers now view December as their critical trading period, 76% said personalising the retail experience was key to connecting with customers and data privacy has become a high risk for business as a result of increased customer data collection.
The overarching theme for Australian retail over the past ten years has been a coming-of-age story.
“It’s when the promise of e-commerce really took hold across the world,” Deloitte national leader for retail, wholesale and distribution, Melissa Dean said. “It saw the explosion of online retail goliaths and created a booming fulfilment industry.
“As retailers begin to look past Covid-19, there is a sense that technology, innovation and new business models will allow the industry to capitalise on emerging consumer behaviour and take a big step forward toward defining what the future shopping experience will look like,” she said.
Australian Retailers Association CEO, Paul Zahra said as retailers ramp up preparations for their busiest time of year, the mood is upbeat, but questions remain over the severity of the cost-of-living challenges and how these will impact consumer spending.
“Despite the uncertainty, retail sales have been on a record-breaking run over the first half of this year. Consumers have continued spending in the face of rising interest rates and inflationary pressures, which haven’t had an immediate impact on spending,” he said.
“The concern is that it takes some time for those factors to wash through the economy, so we could see some belt tightening and a softening of sales as we head into 2023. When households are under increased financial stress, discretionary purchases are some of the first things consumers cut back on.”
And labour shortages continue to be a major issue with the recruitment of Christmas casuals looking difficult, he said.