Last updated on November 26th, 2022 at 03:06 pm
More, earlier, and deeper discounts: Companies began offering holiday discounts around Veteran’s Day. Amazon had Prime Day in October, and Walmart had new digital sales every Monday in December.
Inventory is finally returning to normal
Supply chains have mostly recovered, and brands have ordered higher levels of inventory than in previous years to be safe, so there is plenty of product on the shelf.
However, this is causing retailers and e-commerce brands to offer more sales in order to avoid being stuck after the holidays.
Consumers are making choices between what they need and what they want, and they plan to spend less overall this holiday season.
Because sales behavior began earlier, expect a faster slowdown in DTC as shoppers complete their shopping earlier.
Direct to Consumer
DTC is being more cautious with ad spend and lowering volume because: As advertisers are more cautious with their dollars, less spending generally means fewer e-commerce sales because paid spending is such a key driver.
Spending in the fourth quarter is up, but not as much as in previous years. Growth at any cost is not an option in this funding environment, especially for VC-backed DTC brands that are cautious about spending, facing a cooler funding environment, and trying to show an attractive CAC/LTV and extend their runway.
SMS and emails, the most cost-effective alternatives, will see a bump but are becoming more competitive.
Retail and Ecommerce Innovation
Innovation in retail and ecommerce tech is important for driving sales, so you can expect to see more tech for the Metaverse, social shopping, and experiential retail.
Brands and retailers are under pressure to cut costs, so they will look at all of their SAAS partnerships and end the ones that can’t show ROI.
Different segments are feeling the pinch differently.
People overspent last year in certain categories such as electronics, computers, and homes, so this year is all about small gifts.
is returning to brick-and-mortar stores, a post-pandemic trend that benefits large retailers like Walmart, which can attract customers with low-cost grocery items.
Lower-end consumers will upgrade to accessible luxury but keep it under $100; truly high-end consumers are immune to recessionary pressures, so LVMH is doing well.