End-of-year shopping data is streaming in, and it’s already revealing clues about how consumers may buy in the upcoming year.
That’s what Rachel Tipograph, CEO and Founder of MikMak, and Matt Britton, CEO and Founder of Suzy, dug into in the recent webinar, “State of the Consumer: How End-of-Year Consumer Shopping Can Uncover 2023 Insights.” In this in-depth discussion, the pair of experts examine the consumer patterns that are surfacing as the 2022 shopping season wrapped up, and they lay out how eCommerce brands can leverage trends to lift sales in 2023.
Finances weighed heavy on consumers’ minds this past holiday shopping season, and that could be stalling retail growth.
According to Deloitte, 51 percent of holiday shoppers said they expected to spend more on holiday shopping because of inflation. The same study found that 66 percent of consumers planned to make more frugal purchasing decisions to cope with higher prices. Plus, inflation woes are piling onto other worries, including concerns about a recession. That all could shift the way shoppers spend in 2023.
End-of-year shopping and consumer trends throughout the past year suggest shoppers are behaving differently from years past. Here are a few trends Tipograph and Britton say they see emerging:
Shoppers are trading down
Consumers are worried about high prices and a potential recession. Tipograph says that’s causing shoppers to trade down to less-expensive products. For instance, rather than buying a $150 bottle of whiskey, they may be settling for a $75 bottle. Tipograph says eCommerce brands can stay ahead of this trend by making sure they’ve built a diverse product portfolio that speaks to different price points.
As high prices and a possible recession weigh on consumers, they’re adding essential items to their shopping baskets. Tipograph notes that MikMak basket-level data shows the most popular items in Walmart shoppers’ carts were personal care and grocery products.
MikMak category data also suggests that shoppers across the board are picking up staples in place of more frivolous items. According to MikMak’s Shopping Index, the top three product categories shopped in 2021 were toys, beauty, and hair & personal care. In 2022, alcohol & groceries topped the list, followed by health & wellness. The toys category dropped into the third spot in 2022.
Although shoppers are making fewer trips to retailers, they are adding more items to their shopping baskets. According to MikMak insights, the average basket size grew from seven items in 2021 to nine items in 2022.
Overall, Black Friday and Cyber Monday shopping drove billions in sales in 2022. But consumer insights tell an even deeper story about how shoppers could make purchasing decisions in the next year. These are a few of the biggest trends that the experts say stand out from Black Friday and Cyber Monday shopping:
Online sales are growing
Online sales broke records during 2022’s holiday shopping season. Black Friday’s online sales rose 2.3 percent to $9.12 billion—a historic high. Cyber Monday sales also struck all-time records, hitting $11.3 billion.
The shopping season is starting sooner.
Consumers also appear to be kicking off the holiday shopping experience earlier. In 2022, shoppers spent $5.29 billion on Thanksgiving Day—marking a 2.9 percent increase from 2021.
According to MikMak data, 2021’s biggest retailers continued to wrack up the highest share of purchase intent (PI) in 2022. Those top retailers are:
Tipograph and Britton stress that these retailers appear to be gaining even more of an edge as shoppers buy more groceries and staples.
Buy now, pay later (BNPL) orders surged in 2022. During Cyber Week, BNPL orders soared 85 percent, with revenues increasing 88 percent. However, Tipograph and Britton caution that rising consumer debt could be feeding a bubble–and retailers should treat BNPL with caution as economic pressure increases.
As holiday shopping tails off, eCommerce marketing strategies from throughout the year are also crystalizing. One clear strategy is that brands are shifting to include more social media platforms in their marketing strategies. Social channels drove 66 percent of all eCommerce traffic on MikMak’s Platform, according to MikMak Shopping Index 2022. Additionally, the percent of traffic on MikMak platform from social channels grew 44 percent since 2021.
Wondering what social platforms performed best throughout the year? In 2022, Facebook locked in the highest purchase intent click (PIC) share with 56 percent. Instagram drove the second-most clicks, with 32 percent, and TikTok leapfrogged four competitors in 2022 to land in the third spot.
As social commerce continues to heat up in 2023, Tipograph and Britton say eCommerce brands will want to dive into metrics and identify which channels are netting the newest customers, as well as which are bringing in the highest ROI.
Overall, holiday sales can tell an in-depth story about how consumers may spend in 2023. And as financial stress piles up, it’s already affecting what and where they buy. However, these insights just scratch the surface when it comes to understanding consumer behaviors going into 2023. Watch the full webinar, “State of the Consumer: How End-of-Year Consumer Shopping Can Uncover 2023 Insights,” to learn more ways shopping habits are changing and what it could mean for eCommerce brands in the coming year.