2023 Holiday Shopping Trends to Be Ready For—And How to Reduce Chargebacks
As the 2023 holiday shopping season nears, there’s no shortage of headwinds, with nagging inflation expected to crimp shoppers’ purchases this year. However, merchants still have plenty to be merry about. Those who understand current holiday spending trends—and are ready for them—are likely to have the jolliest season and win over shoppers.
Understanding these holiday shopping trends will not only help merchants surprise and delight customers, but it can also help reduce costly chargebacks and enhance the total customer purchase experience—ultimately generating more customer loyalty.
So, what are the expected holiday shopping trends likely to shape consumer spending decisions this holiday season? Here are four worth paying attention to and how to address them:
1. The holiday shopping season is getting longer.
Increasingly, holiday shoppers aren’t limiting their spending to the weeks between Thanksgiving and Christmas. They’re starting earlier—September or October—and continuing to spend into January and beyond, using up any gift cards they received. A survey by Google found that shoppers globally on average had 21% of last year’s holiday shopping done by mid-October.
In hopes of winning early shoppers, many merchants are rolling out sales and discounts earlier—sometimes before Halloween, which falls in late October.
Why it matters: As holiday shopping and spending becomes a more prolonged activity, merchants must worry more about purchase confusion and chargebacks—as shoppers are more likely to forget about gifts they bought months ago and, in turn, dispute charges they don’t recognize. Merchants should embrace chargeback prevention tools like Ethoca Consumer ClarityTM that allow them to jog customers’ memory of purchases and minimize the risk of purchase confusion.
2. Shoppers turn to more and more shopping channels.
Shopping has increasingly become a multichannel experience—and that’s especially true over the holiday season, as people visit different retailers’ ecommerce sites and physical stores looking for the best gifts at the best prices.
Due to the competitiveness around the holidays, many retailers hold sales and in-store events to entice shoppers both to visit them online and in-store, where they tend to spend more on average, research shows.
Why it matters: Brand awareness is more important than ever to merchants looking to win shoppers over the holiday season. Ethoca Consumer Clarity helps merchants stay top of mind by providing them with an easy way to continually engage with customers through something they use regularly: their digital banking channels. Merchants can have their logo and recognizable name appear in all relevant transactions.
3. Return policies become a deciding factor.
Consumers are getting wiser about comparing not just the price of products and services, but also merchants’ return and exchange policies. This can be a particularly big concern around the holidays, as shoppers wonder whether recipients will need or like the gifts they’re buying.
Return policies—including the ease of making returns—are becoming a bigger purchase consideration. A recent survey found that 93% of U.S. and UK shoppers want flexible return policies. Moreover, Salesforce predicts that retailers with return windows of 30 days or less will see 7% fewer online sales in October or November.
This data suggests that merchants should consider allowing consumers to return items for a longer period post-purchase—such as weeks instead of days—and making initiating returns less of a chore.
Keep in mind that some major online retailers already make returns very easy, allowing shoppers to simply leave returned items on their doorstep for carrier pickup and providing very fast purchase refunds. In this competitive environment, it may be in a merchant’s best interest to be flexible about returns.
Why it matters: Businesses that offer easy return policies can avoid purchases turning into disputes—as consumers may turn to the costly and time-consuming chargeback process to get a purchase refund when they’re not able to return unwanted items.
4. AI and personalization influence shoppers’ purchase decisions.
Artificial intelligence (AI)—specifically generative AI that can help people come up with new ideas and discover new information—has gotten a lot of buzz this year. And it’s starting to play a role in how people shop and decide what to buy. In fact, 1 in 6 shoppers has already used generative AI for purchase inspiration, according to Salesforce.
To take advantage of this trend, more retailers are evaluating how to use generative AI to help personalize the shopping experience and provide more customized recommendations.
Why it matters: Personalization is clearly becoming a must-have, as shoppers increasingly seek purchase ideas and marketing tailored to their preferences and needs—with the right offer, in the right channel. This means personalization is becoming important to maintaining a competitive advantage. While using generative AI as a business tool is still relatively new, it’s important for merchants to understand how it’s changing shopping and spending behaviors and expectations.
Why a better customer experience prevents chargebacks
Businesses that understand how consumers’ holiday shopping habits and expectations are shifting and take steps to meet those expectations will be best positioned to win them over. And many of these trends affect chargebacks—as consumers are more likely to dispute purchases when they have a less-than-ideal shopping experience or don’t remember purchases they made when looking at transactions in their digital banking app.
Ethoca Consumer Clarity offers a range of benefits by helping merchants increase brand awareness and loyalty, reduce purchase confusion that often leads to chargebacks and better engage with customers right through the digital banking apps they use every day.