What kind of a holiday season will 2023 be?

While no one has a crystal ball that can see exactly what Q4 will bring, it seems we’re in for a relatively solid, if  not superlative, season for retailers.

“We’ve had mixed signals over the last several years, yet the holidays have been pretty resilient,” said Matt Katz,  Managing Partner at SSA & Co. in an interview with Retail TouchPoints. “Yes, there are headwinds like inflation  [this year], but there’s very high consumer confidence and markets are responding to that. A good indicator  of how people feel is that travel is back, which also means that experiences and experiential retail will be very  important. Because of all these things, gift-giving may be more functional than the extravagant purchases of  the past. There’s still a limit on spend.”

Others see a less rosy picture: “There’s lingering inflation and the looming [resumption] of student loan  repayments in October, along with consumer savings levels versus credit card balances that are all pointing to  a tougher holiday season,” said Shawn Ashworth, Managing Director and Co-lead of the Retail Performance  Improvement practice of Berkeley Research Group in an interview with Retail TouchPoints. “As you pull apart  INTRODUCTION 3 2023 Holiday Guide: Prioritize Smart Pricing, Promotion and Customer Retention • Pricing and promotion strategies: While store-wide or site-wide sales might bring in a rush of traffic,  they are more likely to erode margins than more targeted promotions — both in terms of which items are  promoted and which customer groups get those offers; • Turning new customers into repeat customers: While this is a year-round mandate, it needs to be  intensified during the holidays when consumers “sample” new brands more often; and • Taking advantage of a longer holiday season: Smart retailers can use the elongated season both to  make promotional and inventory course corrections, if they’re needed, and also to smooth out the sales  spikes that stress both in-store and online retail systems.

the data, there are definite winners and losers: luxury and off-price will continue to win, but it will be a tough year  for specialty retailers focused on low- to middle-income [consumers’] discretionary spending, and department  stores will continue to struggle.”