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New Report From ShipStation Suggests U.S. Consumer Holiday Spend Will Decrease, Contrasting With Optimistic Merchant Expectations

Data shows the impact of inflation, merchants’ high expectations for peak season performance, and the strategies they can adopt to remain competitive

ShipStation, the world’s leading cloud-based ecommerce shipping solution, today released a report based on findings from a global consumer and merchant study conducted by Auctane, which operates the ShipStation brand, and Retail Economics, an independent economics research consultancy. The Holiday Shopping Trends Report: Winning Customers Despite Uncertainty compiles insight from over 8,000 consumers and over 800 merchants around the globe*. It outlines consumers’ downward sentiment toward spending, merchants’ high expectations for peak season sales, and shares the strategies merchants can adopt to remain competitive as they close out 2022.

According to the report, 58% of U.S. consumers expect to cut back on non-food spending this holiday season. If consumers behave as predicted, this could mean a $30 billion elimination of consumer spend from the U.S. market and a 14% spend reduction year-over-year. Meanwhile, around half of surveyed merchants expect online sales to increase this holiday season.

“Inflation and economic uncertainty are forcing consumers to rethink their spending priorities this holiday season,” said Robert Gilbreath, General Manager of ShipStation. “To combat this, merchants should proactively formulate a holiday season game plan. This includes re-examining and improving the experience they offer: from the moment an order is placed online through last-mile delivery."

“Consumers are concerned, budgets are under pressure, and households are intending to cut back this year,” said Richard Lim, CEO of Retail Economics. “We believe successful retailers will be those who double-down on their value proposition and who use data-led marketing to sensitively communicate festive joy during these difficult times.”

Key findings from the report are broken down into three sections. Highlights include:

The financial squeeze:

The report analyzes the current economic landscape and how it is impacting consumers and merchants ahead of the holidays. In the U.S., inflation remains the biggest concern for consumers. Online searches for the term ‘save money’ have increased in the U.S. and hit a five-year high globally. However, merchants remain optimistic this holiday season. Surveyed merchants in the apparel industry are particularly confident, with 65% citing that they expect higher order volumes this holiday season than in 2021.

The cut-back landscape:

The report outlines where consumers and merchants are planning to save money over the holidays. More than 25% of consumers globally expect to cut back spending in the apparel category. Meanwhile, over a third of merchants surveyed will respond to cutbacks by increasing delivery costs, and more than a quarter will extend delivery timeframes. This is a critical misalignment, as the report found that delivery speed and cost are the two most important conversion factors for online shoppers.

Adapting and thriving:

ShipStation challenges merchants to carefully consider how they define and communicate their value proposition. The research identifies five critical areas of improvement merchants are recommended to prioritize to successfully navigate current economic challenges. The report also contains a matrix of the four key consumer archetypes merchants should pay attention to this holiday season, mapped against attitudes toward personal finances and underlying financial security.

For additional findings and to download ShipStation’s full report, Holiday Shopping Trends Report: Winning Customers Despite Uncertainty, visit here today.

*This dual-sided research was conducted by Retail Economics and Auctane, a leader in shipping and fulfillment software, which operates trusted brands like ShipStation, Stamps.com, Packlink, ShippingEasy, ShipWorks, ShipEngine, Endicia, Shipsi, GlobalPost and Metapack. The report contains economic modeling and data-driven insights developed from a nationally representative consumer panel survey comprising over 8,000 households across the US, UK, Canada, Australia, Germany, France, Italy, and Spain. The research also details input from over 800 businesses across the US, Canada, the UK, France, Germany, Italy, Spain, and New Zealand.

About ShipStation

Every day, tens of thousands of ecommerce merchants rely on ShipStation to solve the day-to-day challenges of importing orders and processing shipments. The trusted leader in shipping software since its founding in 2011, ShipStation helps online sellers scale their businesses and deliver exceptional customer experiences, with an intuitive online solution that allows them to efficiently ship orders -- wherever they sell and however they ship. The multi-channel and multi-carrier platform offers the most integrations of any ecommerce solution, with more than 300 partnerships with leading shopping carts, marketplaces, carriers and fulfillment services, including USPS, UPS, FedEx, Amazon, Shopify, and BigCommerce. ShipStation is a member of the Auctane family of companies and is headquartered in Austin, TX. Auctane brands include Endicia, GlobalPost, Metapack, Packlink, ParcelGuard, ShipEngine, Shipsi, ShipStation, ShippingEasy, ShipWorks, and Stamps.com, with offices in Atlanta, Austin, El Segundo, London, Madrid, St. Louis, Sunnyvale, and Zielona Gora.

For more information, visit https://www.shipstation.com.

About Retail Economics

Retail Economics is an independent economics research consultancy focused on the consumer and retail industry. Retail Economics provides independent thought leadership on major economic and retail trends and analyses their impact on the industry. Retail Economics provides proprietary data on sector growth, behavioral trends, channel performance and forecasts.

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