How Economic Headwinds Will Shape Shopper Purchasing Habits In Q4 2022
In the world of apparel eCommerce, the peak holiday shopping season is traditionally characterized by earth-shattering shopper demand and grandiose sales numbers. However, with inflation recently hitting a 40-year high, ongoing supply chain woes, and sinking shopper confidence in economic stability, this upcoming peak shopping season will be anything but smooth sailing.
In these critical weeks leading into Q4, it is of paramount importance for brands to begin developing a plan to capitalize on shopper purchasing habits during the peak season. To provide further insight into how economic headwinds will factor into shopper purchasing habits, we've compiled a short list of key factors to consider when developing your Q4 game plan.
1. Shoppers Still Prioritize Personalized Experiences
While brands could be forgiven for thinking that prices and promotions will be the leading priorities for shoppers this season, it turns out that isn't quite the case.
According to a recent report by Astound Commerce, shoppers in the Americas and the Middle East ranked loyalty as the top motivator when determining which brands they choose to buy from, which is consistent with findings from 2021. This differs slightly from European shoppers, who shifted their priorities from loyalty to price as their top motivator this year.
Because shoppers still prioritize brand loyalty, even in the face of historically-high inflation, personalizing the shopping experience should be at the top of every brand's peak holiday season to-do list. This can range from targeted product offerings, sending abandoned cart reminders, or eliminating common pain points within the shopper's journey.
For example, in the eCommerce apparel industry, shoppers frequently struggle with finding their best-fitting products, often relying on outdated size charts or model dimensions from people who look nothing like themselves. To streamline the sizing journey, drive conversions, and cement shopper loyalty, leading apparel brands have been integrating modern sizing solutions (like WAIR), which deliver personalized and accurate sizing experiences at scale.
2. Consumption Habits Will Be Affected, But Only Slightly
As their confidence in the direction of the global economy wanes, shoppers are actively altering their purchasing habits in preparation for an upcoming recession. While this means that most will be cutting back on discretionary goods, services, and experiences, a recent report by Astound Commerce found that 2 in 5 shoppers plan to spend the same amount on gifts this year as they did in 2021.
What made 2021 a bit different, however, is that brands frequently struggled to stock their shelves with inventory as demand climbed and supply chain woes persisted. Now that most apparel brands are suffering from inventory glut, shoppers will be looking to get more for their dollars through bargain pricing, coupons, and promotional offers leading up to and during the peak shopping months.
Brands are also likely to see a healthy mix of in-store and online shopping as concerns around COVID-19 wane, and social distancing becomes a whisper in the wind. While in-store shoppers won't have to struggle with issues such as accurate product representation and sizing, online shoppers are highly likely to face these issues during their gift-buying journey.
With over 50% of eCommerce apparel returns linked to sizing and fit alone, online shoppers who aren't offered alternatives to size charts and model dimensions may resort to bracketing and wardrobing to ensure they order the correct product the first time. This could have a potentially disastrous effect on post-holiday returns for brands that continue to rely on the aforementioned sizing methods.
3. The Rise Of Buy Now, Pay Later
While shoppers often prefer getting a head start on their holiday gift-buying journey, the ongoing cost of living increases we've seen in recent months will make it difficult for them to finance these purchases months in advance. As such, we will likely see a significant rise in the use of buy now, pay later plans.
To help shoppers successfully check off their holiday gift lists, brands will need to be nimble in their approach to payment options this season. Platforms like Affirm, Sezzle, and Afterpay offer benefits like zero interest, zero late fees, and flexible payment schedules, all of which make the holiday gift-buying experience much easier for inflation-stricken shoppers.
There are also alternative services such as Blackcart, which allow site visitors to receive and try the product before purchasing it, further alleviating shopper apprehension, especially regarding high-involvement purchases such as luxury items and apparel. Each of these options has its own unique benefits; choose the one that best aligns with the needs of your brand.
4. Shoppers (and Brands) Will be Starting Early This Year
Ongoing supply chain woes and inventory glut have put eCommerce brands in a difficult spot regarding their holiday pricing strategies. To rid the shelves of seasons-old inventory and make way for new collections, brands have resorted to dynamic pricing strategies to the delight of their more price-sensitive clientele.
Eager to capitalize on these dynamic pricing strategies, shoppers are highly likely to complete their holiday shopping weeks in advance, which will impact brands through reduced demand for their in-season (and standard priced) collections.
While discounting products to clear shelves may be inevitable, brands can at least do so efficiently by ensuring that none of this sold merchandise finds its way back through returns. For example, brands can mark heavily discounted items as "final sale," which, considering the price decrease, is unlikely to step on too many shoppers' toes. Brands can also lean into modern sizing solutions (like WAIR) to help shoppers purchase their best-fitting products the first time, significantly improving their likelihood of keeping and loving the products they purchase.
Winter is Coming...Is Your Brand Ready?
Navigating this year's peak shopping season will be a trying experience for apparel brands. That said, opportunities are still to be had, provided that your brand prepares for these potentially rough waters well in advance. This is only the initial entry in WAIR's peak season survival guide; stay tuned to learn how your brand can reduce cart abandonment, boost conversion rates, and lower the possibility of returns during the most critical months of 2022!
Are you ready to unlock your brand's peak season potential with WAIR? Schedule a demo here, and be sure to follow us on Twitter, Instagram, LinkedIn, and Facebook for all your fashion content needs!