Inflation is comin' to town
It's the most expensive time of the year
After past seasons packed with global viruses, store closures and lockdowns, holiday shoppers are eager to return to normality. But those hopes are on hold once again as 2022 consumers grapple with a different hurdle: Inflation. Still, shoppers aren’t letting price bumps and out-of-stock messages get them down. Instead, they are making the holidays all about quality experiences, whether it be sitting around the tree with family or sailing through the online checkout of their favourite store. From holiday travel plans to preferred shopping channels, our latest research paints a vivid picture of what consumers want, so retailers can give them what they need.
The 2022 Loqate Holiday Shopping & Shipping Consumer Confidence Survey explores the behaviours, trends, and expectations of consumers in leading markets across the world.
More than 2,700 consumers across ten countries and regions shared their views on how they plan to navigate this holiday season, considering the current state of their economy. Research was conducted in August 2022.
Explore the results of our research below to learn how you can successfully engage and deliver cheer to each and every customer.
Travel & celebration
Covid-19 has interrupted past seasons’ gatherings many times and in many ways, but this year's consumers are persistent. Globally, shoppers plan to spread holiday cheer in person despite the influx of health crises, inflated gas prices, and crowded flights.
77% of global consumers plan to travel for the holiday, but how far they’re willing to go differs based on the country.
Do you plan to travel this holiday season?
The US is happy to travel domestically (33%) but more reluctant to cross oceans (11%). But on the other side of the globe international travel is preferred (44% UK & EU).
Inflated travel fees certainly play a factor. Even a short drive to a holiday party can be pricey, with the average cost of gasoline around the world reaching 5.07 US dollar per US gallon as of September 2022.
Global Gas Prices per Gallon in Sept 2022
Flyers won’t fare much better as airlines seek to offset increased fuel costs by raising ticket prices. Jet fuel now represents as much as 38% of an average airline’s costs, up from 27% in the years leading to 2019.
That won't stop 95% of shoppers from celebrating the holidays in person with friends, family, or co-workers.
Virtual gatherings seem like a thing of the past. Less than 4% of global shoppers are planning on video conference celebrations.
Do you plan to travel this holiday season?
TIP: Remove the turbulence from your online booking journey
Travelers will jump ship for a lower price or faster checkout process. Optimize your user experience (UX) with features such as address auto-fill to streamline booking and ensure customers make it to the end of your checkout.
Shopping Timing & Deadlines
Despite inflation concerns, global shoppers are already flocking to the shelves. Talks of supply chain issues, congested ports and low inventory are motivating consumers to get a jump on annual holiday discounts that are starting as early as October.
87% of global shoppers plan to start shopping before December, but consumers in the EU are early birds. 24% of them already started in August compared to the UK (22%) and the US (18%).
What global consumers think
say that being unable to purchase a product due to it being out of stock online is having the greatest impact on their shopping behaviour
will use more comparison sites to look for product availability
say that a product taking longer to be delivered than they were told at time of purchase is having the greatest impact on their shopping behaviour
Doorbusters and hot item deals will be going fast on Black Friday, and the 28% of shoppers waiting to buy gifts in November don’t plan to miss them.
12% of global shoppers may be right to consider low inventory the biggest concern this season. While many retailers have an inventory surplus due to mid-pandemic delayed shipments, profit-conscious chains like Kohls and Gap plan to store excess inventory for later seasons.
What retailers think
of brands are changing shipping strategies to reduce the impact of global shipping delays
of brands will focus on showing available inventory in nearby stores
of brands say procuring and managing inventory will be a top challenge over the next year
Shoppers aren’t willing to fall victim to predicted delays, although the level of caution decreases with age. 4% of Gen Z plan to do some last minute shopping on Christmas Eve, while only 1% of those over 25 plan to do the same.
When do you plan to start your holiday shopping?
TIP: Invest in your loyal customers with programs that get them excited to buy
Your customers are looking for a reason to continuously shop your brand. Give them a chance to feel special and save big with strong incentives like loyalty programs and VIP memberships. It’s a win-win; just be sure to fill your customer databases with verified email addresses, phone numbers and home addresses to ensure the right customers can sign up early.
Gift Giving, Exchanging, and Shipping
The re-emergence of non-virtual holiday parties means that many of us have space to fill under the tree. Shoppers may still be reluctant to pick out gifts in store, but they do want the joy of handing out presents in person. To not disappoint customers, retailers will need to combat the pressures of last-mile and logistical challenges with reliable address verification tools.
of industry professionals expect the 2022 peak season to be more chaotic than 2021
of industry professionals said they were ensuring clients received enough inventory by shipping early
Last year, Royal Mail delivered over 11.9 billion letters and parcels. In Germany, Deutsche Post DHL transported 1.8 billion parcels, compared to 1.6 billion in 2020. This year shipping and online delivery will be just as massive. 60% of shoppers globally plan to ship gifts to their family and friends.
How do you plan to give gifts this year?
80% of global shoppers prefer to find presents online, especially in the EU where only 17% of shoppers plan to buy gifts in person.
Gift cards are the perfect present for the 58% of shoppers who are extra wary of high inflation. 20% of global shoppers will be avoiding price increases on goods and services by sending a set amount of money through digital gift cards or donations.
Gift Giving by Generation
of Gen Z are choosing to send gift cards instead of purchasing physical gifts in stores, the most out of all generations
of Baby Boomers are keeping it old school and buying physical gifts in stores
of Millennials prefer to ship gifts to a post office or locker
TIP: Make gifting easy with omnichannel shipping and pickup options
Mid-pandemic shoppers that experienced the flexibility of alternate pickup options continue to want every option at their disposal. Ensure your customer profiles are up-to-date and accurate so shoppers can seamlessly retrieve their gifts, whether they are shipping to their homes or picking up in store.
Budgets & Spending
Globally the Consumer Price Index has continued to increase. In the last 12 months, the UK CPI increased 8.65% and Germany’s increased 8.48%. Countries like Spain saw it jump even further, over 10%. Due to inflation, consumers are paying more for holiday goods than ever before. But that’s not stopping shoppers from planning their end-of-year purchases. 2020’s Covid concerns seem to be a much stronger deterrent than the current inflation and consumers are ready for some retail therapy after two years of reduced spending.
People’s concerns about inflation vary depending on where they live. Consumers in the US and UK worry the most—66% consider high inflation their biggest concern. Consumers in the EU worry the least (49%). Competitive price drops will become an advantage for the 25% of global consumers planning to spend more than last year.
Global Inflation rate since March 2022
of global consumers plan to spend less than last year
Despite strong concerns, the majority of shoppers (49%) plan to spend the same on gifts as last year. Still, those who have lived through past economic crises are keeping a more watchful eye on their holiday spending compared to younger generations.
2022 Global consumer concerns
are concerned about their personal health
worry about their personal finances
worry about their country’s economy
How much do you plan to spend in total on gifts this holiday season?
Unlike during peak Covid times, few shoppers care about contactless delivery (4%), kerbside pickup (2%) or in-store gift wrapping (5%). Instead, promos and discounts (17%) and free shipping (18%) are the most important purchase factors.
Physical gifts aren’t the only thing on the wish list this year. Digital assets are the new hot item and a trip to the metaverse might be within budget for 2022 shoppers.
83% of global consumers show interest in making purchases via the metaverse
51% of millennials said they visited a retailer in the virtual world to get advice, make a payment or browse a product range when shopping for a physical item
TIP: Reimagine shopping and experiment with new consumer interests
As prices increase, shoppers looking to cut costs are becoming more likely to switch brands. Encourage consumers to spend with exciting offerings that reflect growing consumer interests like virtual living. For retailers that blur virtual boundaries with reality, collecting and tracking accurate customer data will be key to supporting seamless navigation between the digital and physical worlds.
Online vs In-store
Every passing day a new health crisis is putting shoppers on high alert. But it’s not stopping the most faithful customers who have made peace with the state of the world. Having successfully undergone the many twists and turns of the 2020 and 2021 shopping experience, consumers have accepted that returning to pre-pandemic habits is no longer possible. Instead, today's global shoppers are embracing the new future of retail – hybrid experiences.
Only 20% of consumers consider Covid-19 to be a big issue this year and folks are out in force; 17% of global shoppers plan to go in-store. Less UK shoppers (12%) are planning for in-person shopping than the US (18%) or EU (19%).
Hybrid customers are not giving up the convenience of online shopping. 28% of global customers plan to do the majority of shopping online and eCommerce sales are projected to grow to $5.4 trillion worldwide in 2022, compared to $4.9 trillion in 2021.
of shoppers say having a local presence was a significant influence on which brands they chose to purchase from in the past year
of global brands are creating more ways for customers to interact with them in 2022
of merchants plan to invest further in buy online, pick up in store options
This year, mobile has surpassed computers as consumers’ most popular online shopping device. But mobile is not as favorable for the older generation. 57% of Boomers prefer to shop via computer, 26% via mobile and 17% tablet.
Global device choice
If retailers want to engage the 55% of hybrid shoppers, they will need to use data to bridge digital with physical retail and support the 85% of shoppers that expect consistency during every interaction, no matter where it takes place.
Techniques retailers should leverage in 2022
of consumers want to watch product videos before they buy
of consumers say they’re likely to use live chat in the next year
of consumers are OK with brands using their personal info to deliver relevant content and offers
TIP: Seamlessly blend digital and physical experiences
Brands should optimise the customer journey so that in-store shoppers are afforded the same quality of experiences as those online. By capturing accurate customer data that can be synchronised across all channels, retailers can develop a 360-degree customer view that allows for an exceptional level of service regardless of changes in device or location.
The biggest shopping days of the year are approaching and brands, big or small, will have massive amounts of traffic on their sites. The worst thing that could happen at this critical moment is for your website to drive customers away. Checkouts will be the most critical parts of your digital shopping experience, but 2022 consumers may not be as patient as brands think. Simple, easy and fast will be key terms to remember this season.
Brands underestimate the impact of bad customer experiences on abandonment
What Consumers Think
of consumers will abandon a brand after two bad digital interactions
What Brands Think
of consumers will abandon a brand after two bad digital interactions
The more effort consumers need to put into the checkout process, the more likely they are to abandon their carts. 24% of global shoppers would abandon their cart due to complicated/long checkouts. 14% will abandon due to too many form fills. 10% if there is no guest checkout, and 5% if there is no address autofill.
What would make global shoppers most likely to abandon their holiday shopping cart?
76% of global shoppers have purchased from a retailer that uses auto-complete address entry in checkout. This is highest in the US (81%) and UK (83%). In the EU, 68% say they have used autocomplete and 32% have not.
eCommerce will account for 20.4% of global retail sales by the end of 2022. Considering that there will be 11% more shoppers online than in-store, a poor online checkout can put a significant dent in holiday revenue.
Average order value by global shoppers at the end of 2021 was $99.18
TIP: Take customers through the checkout in less than 5 minutes
During the bustling holidays, digital customers tend to use their carts as more of a scrapbook than a direct means of purchase. But finding the right items at a good price can trigger the impulse to buy immediately. Keep digital interactions simple, intuitive, and fast to encourage shoppers to quickly complete their purchases.
Customer Comms Strategies
It's no secret that consumers are running the show this holiday season. Retailers are making customer care a strategic focus to ensure customers are happy and engaged. But with customers tackling their shopping from multiple sites and even more platforms, having successful relationships means nailing the communication strategy.
54% of customers prefer to receive updates about online orders via email, matching with how companies like to offer customer service. 56% of companies in the UK and 57% in the US consider email their top channel.
Non-email messaging preferences differ by culture. Social media (13%) and in-app messaging (16%) are more popular in the EU, In contrast, SMS messaging is more popular in the US (23%) and UK (20%).
Retailer plans to improve customer support in 2022
without mobile app channels plan to add
without social media channels plan to add
plan to significantly expand their chat channels
plan to significantly expand their phone support channels
69% of organisations plan to devote roughly 50% of their annual marketing budget to the 2022 holiday shopping promotions.
Customers have wandering eyes and smaller budgets due to inflation. Lower the risk to their brand loyalty by connecting with them via the channels that fit their needs. 38% of Boomers will be shopping directly via the brand website. Only 3% plan to use social media to shop online.
Top channels for holiday shopping
Brand website Mobile website Mobile app Social media Online marketplace Voice-assisted shopping SMS (text to order)
TIP: Improve your understanding of customer demand
Consumers expect to get exactly what they want, exactly the way they want it. Brands hoping to connect with their customers must take note of the preferences consumers express via their shopping behaviours and habits and use that data to create a favourable communication strategy to meet shoppers where they are.
Fraud & Theft Concerns
Holiday shopping is all about finding the best, most thoughtful gifts through our favourite and trusted retailers. But in a time where consumers are on the hunt for the best deals to stretch their gift budgets, they may be willing to take more risks than usual. Shopping from unfamiliar brands or using digital payment methods with poor forms of identity verification can make holiday shoppers a target for the fraudsters and thieves that increase activity during the most hectic time of the year. Luckily, most global shoppers know that if it sounds too good to be true, it usually is.
Fear of porch pirates remains high heading into the holidays. 75% of global shoppers are concerned about theft, but location plays a big factor in how much. 25% of US shoppers are very concerned compared to 28% of EU consumers who are not concerned at all.
Theft concerns by location
Package thieves are likely to strike anywhere, but some areas are at greater risk. Urban shoppers (23%) are very concerned about theft, more so than those in Rural (13%) and Suburban (15%) areas, and with good reason. From 2019 to 2020, there were more than 2.6 thousand “theft of mail” offences reported in England and Wales. These numbers have continued to rise between 2020 and 2021.
Fraud is more concerning than theft for 80% of global consumers, but not all generations are on high alert. Despite being some of the biggest victims of fraud during the holidays, 24% of Baby Boomers and 21% of Gen Xers are not at all concerned compared to Millennials (17%) and Gen Z (17%).
How concerned are you about fraud when shopping online?
Credit card and identity fraud are highly detrimental to holiday revenue. Lack of trust with credit card info is the reason why 18% of customers abandon carts. Banks are just as wary. The number of orders manually screened and declined in 2021 was consistently around 20% for all merchants globally.
TIP: Keep the Grinch at bay with address verification
Verified address data can do a lot to minimise cases of fraud and theft. The ability to validate addresses across the globe in real-time gives retailers the power to confirm the identity behind each order during the payment process as well as pinpoint the right delivery location down to the exact apartment.
Nothing turns loyal customers into strangers faster than failing to deliver on time. Unfortunately, world events, from supply chain issues to port labour strikes, have placed more pressure on holiday retailers than many are equipped to handle. 2022 consumers are well aware of the circumstances and seem to be managing their shipping expectation. But that does not mean they are willing to settle.
What consumers say
84% of global shoppers are concerned about packages not arriving on time, and the older customers get, the less likely they are to give second chances. Baby Boomers are the most unforgiving, with 46% of shoppers not likely to purchase from a retailer again if they deliver a package late. This is followed by Gen X (38%), Millennials (28%) and Gen Z (29%).
If a package was not delivered in time, would you purchase from that retailer again?
Smart retailers are not leaving the success of their delivery up to chance. 38% of organisations are ensuring clients receive enough inventory by shipping early in 2022; 25% will be using alternative shipment routes, and about 19% are contracting long-term slot agreements with carriers.
How retailers are responding to shipping challenges
of merchants plan to employ data-driven optimised routing in the next 12 months
are changing their shipping strategies to reduce the impact of global shipping delays
are intending to improve their manufacturing capacity
Brands hoping to gain the trust of their customers should consider the benefits of address verification tools. 44% of global shoppers trust the retailer more if they have auto-complete address entry. As a result, 24% of shoppers would make more purchases in the future, and 14% would choose that brand over one without auto-complete.
If a retailer had auto-complete address entry, I would be more likely to:
TIP: Steer clear of misdelivery and failed delivery fees
A failed delivery is not only a loss for the customer. If retailers fail to validate the customer address before shipping the package, they can incur a penalty from the carrier. And those mistakes can add up, especially if you consider the cost of redelivery and the delivery surcharges that are unavoidable around the holiday season.
Returns and Exchanges
eCommerce has made it easy for global shoppers to find the perfect gifts. But at the same time, it has increased the cases of them buying even more than they normally would in store. Without the ability to see, feel and try on digital items, return rates are almost as high as online orders. As a crucial and unavoidable part of the online shopping experience, retailers should treat returns as an opportunity to connect further with shoppers and leave a positive impression.
63% of shoppers do not expect to ask Santa for any refunds this year but shoppers in Europe (40%) are more likely to return or exchange holiday gifts than in the US (35%) or UK (34%).
Only 37% of global shoppers expect to make returns this season, but the traditionally complex returns process means that older generations are less willing to participate. 77% of Boomers will not be expecting to make returns compared to 48% of Gen Z.
of customers in Europe said they are significantly more likely to order a product if they can check out online and return in store
Rather than returning in-person, 26% of global shoppers prefer to ship gifts back to the retailer and 24% prefer to mail back to the sender so they can handle the return.
How would you prefer to make gift returns this season?
The majority of shoppers expect to return or exchange gifts in Jan (48%). 31% will make returns in December, but only 10% expect to make returns after March.
40% of global shoppers are not likely to shop with a retailer who gave them a bad returns experience. 4% more than those who would not forgive late deliveries.
If you had a poor returns experience, how likely are you to shop with that retailer again?
TIP: Make your returns process flexible and frustration-free
Your returns experience should be as evolved as your online checkout process. Brands can use accurate address, phone and email data to quickly identify the customer requesting the return and their purchase history. This will streamline the return process, whether they choose to ship items or drop off in-store, and ensure shoppers leave with their brand loyalty intact.
The economy is changing fast, but customer preferences are changing faster. As retailers prepare for a holiday season full of unpredictability, they will need to be equipped with the right tools that will help them overcome any scenario.
With a multitude of strategies and tactics created to cater to both the CX and the bottom line, the path forward is optimistic for a strong 2022 holiday season. At Loqate, we are committed to bringing forward technology that retailers need to deliver exceptional experiences to every customer, wherever they are located. This is why companies like Nordstrom and Ralph Lauren and ASOS trust us to support them during the peak shopping season.
Our team is here with the tools, data and knowledge necessary to help you succeed through the holidays and beyond. Sign up for a personalised demo today for more tips on how our address verification tools can help improve your customer experience for the peak season.