2022 Holiday Shopping Outlook: 3 Trends Merchants Should Be Ready For
The holiday season will be arriving soon, and merchants need to consider how it’s shaping up to be different this year—and how they can be ready for it.
A slowdown in the economy over the past year along with a host of other macroeconomic factors mean that consumers will be approaching their shopping decisions and behaviors differently from last year. In turn, merchants will face new challenges and opportunities.
Here are three key holiday shopping trends to be prepared for:
1. Holiday shoppers will be seeking more value.
Inflation recently peaked to its highest level in more than 40 years and is already making an impact on consumers’ shopping behaviors.
Consumers have begun pulling back on their spending in many categories—from electronics to autos to apparel—and are proactively seeking out the best prices as well as looking to get “more bang for their buck.”
While some estimates have predicted this will be the largest holiday shopping season ever, that will likely be due to rising prices and not because consumers are buying more.
This holiday season, customers are likely to continue to be more price-conscious and will be looking for merchants that offer not only the best deals on products and services, but also those providing extra value.
Merchants should focus on adding value to the customer experience—as shoppers are likely to favor those that do. That can mean not just offering well priced products or service options, but also providing payment flexibility such as a Buy Now, Pay Later option or easy-to-use digital self-service tools.
Moreover, consumers may pay closer attention to their bank and transaction statements to ensure accuracy, and any unrecognisable charge may be subject to a dispute. So it’s worth making sure you provide them with clear purchase details to prevent transaction confusion and reduce the risk of first-party fraud.
2. Customer experience will become all-the-more critical.
Beyond seeking more value, consumers will likely gravitate toward merchants that provide a smoother and more rewarding overall shopping experience across both in-store and online channels.
Opportunities to provide a better experience can span the entire purchase journey—from offering fast and free shipping and customer-friendly return policies to making it simple for shoppers to keep tabs on their purchase history. It can also mean providing post-transaction offers or ease with reordering an item in the future.
When consumers have negative experiences or service-related issues with a merchant, they may be more likely to cancel their order, or worse, dispute their purchase—leading to costly chargebacks.
Merchants that focus on their customer experience will win more customers—both during the upcoming holiday season and beyond. They will also reduce the risk of negative experiences turning into payment disputes and chargebacks.
Providing customers with recognisable purchase transaction details is an easy way for merchants to add value while also preventing transaction confusion that can lead to disputes. Ethoca Consumer Clarity™ puts rich details such as an easy-to-recognise merchant name and logo, purchase location details and itemised digital receipts into customers’ digital bank statements and with the card issuer’s call center—significantly reducing unnecessary disputes and chargebacks.
3. Fraud—and first-party fraud—may grow.
With prices rising and consumers growing more cost conscious, true fraud and first-party fraud are only likely to become bigger concerns in the months ahead.
Avoiding fraud and unnecessary chargebacks can make a direct and significant positive impact on a merchant’s bottom line—and becomes even more important in a challenging economic environment like we’re facing right now.
Before this holiday shopping season gets into full swing, it’s worth reviewing opportunities to reduce the risk of both fraudulent transactions and customer disputes stemming from either transaction confusion or service-related issues.
Ethoca Alerts notifies merchants in real-time when customers dispute transactions, so that the merchant can take steps to resolve those disputes with the customer before they become costly chargebacks. It can also alert merchants of fraudulent transactions quickly, so they can take steps to reduce the financial toll of that fraud, such as cancelling the order or stopping shipment.
Making the Most of the Holidays
The 2022 holiday shopping season could be rewarding for merchants who are fully ready for it. Those that embrace what today’s shoppers are looking for while also taking steps to reduce financial risks will be best positioned to prosper.
Ethoca can provide the solutions to help you give your customers more clarity and insights around their purchases, as well as the tools to help reduce the potential for costly disputes and chargebacks.