Retail TouchPoints: 2023 Holiday Guide

What will the holiday season be like in 2023?

While no one can predict exactly what the fourth quarter will bring, we appear to be in for a relatively stable season for retailers.

Retailers have been getting mixed signals over the past few years, but the holiday season is coming off pretty strong. This year there are headwinds like inflation, but consumer confidence is very high and the market is responding to that. A good indicator of how people are feeling is that travel is back, which also means that physical and experiential retail will be very important. For all of these reasons, gifting may be more practical than the extravagant purchases of the past, although spending will still be limited.

The uncertain economic environment means retailers will need to squeeze as much value as possible from every holiday season interaction. Some key areas retailers should focus on include:

Pricing and promotional strategies: While store-wide or site-wide promotions may drive a lot of traffic, they are more likely to erode profits than more targeted promotions, both in terms of the merchandise being promoted and the customer base that receives those offers;

Convert new customers into repeat customers: While this is a year-round task, it needs to be stepped up during the holidays when consumers “try out” new brands more frequently;

Take advantage of longer holiday seasons: Smart retailers can use longer holiday seasons to conduct promotions and inventory adjustments (if needed), as well as to mitigate sales spikes faced by in-store and online retail systems.