The 2022 holiday season will be about these three trends

We recap a few key trends from the National Retail Federation’s holiday forecast.
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Francis Scialabba

· 3 min read

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PSA: 🎶 It’s the holiday (shopping) season. 🎶That’s according to the National Retail Federation, which creates its annual holiday forecast based on the period between November 1 and December 31.

The retail trade organization shared a predominantly rosy outlook on the 2022 holiday season on November 3, predicting 6–8% growth despite high inflation and rising interest rates.

  • NRF president and CEO Matt Shay called 2022 “another historic year in retail.” Retail sales have grown every month since May 2020, including during the first nine months of 2022, Shay said.
  • NRF’s chief economist Jack Kleinhenz said prices for retail goods (excluding food, cars, and gas) are up between 4% and 5%, which is lower than the overall inflation rate of 8%.

With that backdrop in mind, here are a few key trends from the NRF predictions:

Omnichannel is king: The pandemic sped up the shift in consumer behavior toward blended commerce, as opposed to purely online or in-store, Shay said. That’s a good thing for retail, he added.

“The role of the store has really changed and evolved, and so I think you have retailers that are able to use stores much more creatively in terms of their inventory management and their fulfillment and the experience they deliver for their customers,” Shay said.

  • That’s forcing consumers to think differently about stores, including buying online and picking up in store, or ordering in the store and shipping to their homes. “Those things, I think, all have created a healthier environment for the retail industry,” Shay said.

Savings and credit are fueling spending: Shay pointed to the socioeconomic divides between shoppers, with “robust” spending by higher-income households, and lower-income households impacted by the increased cost of everyday items.

  • Those lower-income households are still expected to show healthy spending during the holidays, by supplementing their incomes with savings and credit, Shay said. That means they’ll also be looking for discounts to help them stretch their dollars, he added.
  • The availability of consumer credit is one of the many elements the NRF considers in its forecast, Kleinhenz explained.

Labor is still a hot topic: The retail job market is still tight, with 800,000 job openings at the end of September, Kleinhenz said. Retailers are looking to hire not only seasonal workers but also permanent ones, and are often competing with each other for labor. “It will be an ongoing challenge, not only for retailers, but certainly other industries,” he added.

  • But that pressure is one reason the holiday shopping forecast is positive—wages are increasing, and jobs are plentiful. “It’s the strength of the labor market that’s really fueling spending,” Kleinhenz said.—MA
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