Holiday sales increased by 6.1%, is US holiday retail weak?

According to Digital Commerce 360, U.S. e-commerce sales in 2022 will reach $224.31 billion during this year's holiday season, an increase of 6.1% compared to $211.41 billion in the same period in 2021.

Online sales growth in the U.S. has been weak, with consumer spending showing modest momentum since the beginning of the year. In the early days of the pandemic, online sales in the U.S. grew by more than 40% year-over-year for four consecutive quarters. According to the Commerce Department, shoppers spent 6.7% more online in the first quarter of 2022 compared with the same period last year . In the second quarter of 2022, the growth rate reached 7.3%.

However, it is predicted that sales in the third quarter of 2022 will grow at a higher rate than in the first two quarters. This is because Amazon held Prime Day 2.0 in October and achieved good results, selling 100 million items and achieving a GMV of US$8 billion, making a huge contribution to US online sales.

For many retailers, the third quarter of this year may be the golden sales period . This year's holiday shopping season came earlier than in previous years. Data shows that nearly two-thirds ( 64%) of online merchants started their seasonal activities in October, including large retailers such as Walmart and Target. However, the increase in sales in October may mean a decrease in online orders in November and December, and the year-on-year growth rate of online sales will also be smaller.

In addition, excess inventory has led retailers to increase discounts. Consumers have learned through various news channels that retailers are under too much inventory pressure, so they will expect more promotions and discounts this year.

In this year's economic environment, inflationary woes may cause shoppers to reduce holiday shopping . Surveys show that consumers are less willing to spend money during the holidays , especially because the price of necessities such as groceries and gasoline has increased, which has reduced shoppers ' spending budgets . As shoppers become more price-conscious, retailers' customer service policies, such as price matching and price adjustments, will become more important this year.

Nearly two-thirds ( 63%) of online retailers expect high inflation to cause consumers to buy fewer gifts overall this season, and more than half (56%) say rising inflation is the main barrier to growing their holiday sales .

Although physical stores have recovered somewhat after the epidemic, due to the popularity and convenience of online shopping, consumers will reduce in-store shopping during this holiday season, and in-store spending will slow down significantly to 3.3% . This will be conducive to the growth of online sales.

But the good news is that although consumers are facing a lot of economic uncertainties, in addition to inflation, they are also troubled by problems such as falling stock markets and rising interest rates, but they are very optimistic about the economic situation in the United States.

This is undoubtedly good news for retailers. Although many people say there is no peak season this year, if sellers seize the opportunity, they may once again usher in a sales peak.

USA

Holiday Retail