In the second quarter of 2022, consumers spent more as average order size increased due to price inflation. At the same time, retailers and brands competed with vacation activities and other service-based spending for wallet share. Still, there was healthy growth compared to 2021 in key sectors.
Consumer Trends
Despite high levels of inflation, retail sales grew in Q2 and remained well above 2021 levels – the US Census Bureau reported an 8.4% rise in June 2022 over LY. Yet we also saw budgets being pinched as consumers faced rising prices. Shoppers are spending more dollars but getting less in return – dollar sales were up 18% in May 2022 compared to 2019, but unit demand was down 1%. (Source: Retail Dive)
In the first half of the year, from January until May, consumer spending shifted away from big-ticket items. Electronics and apparel store sales fell 1.8% in that period, while furniture and home furnishings sales rose just 2.5%. (Source: Insider Intelligence)
Today’s consumer behavior is multi-dimensional and requires a varied approach in the coming months. Retailers will need to sharpen the value side of their product offerings, while also providing products that will motivate spending over saving. (Source: NPD)
Digital Trends Shaping the Future
Although there is still skepticism about the future and longevity of the metaverse, there is also potential as 64% of consumers report they are excited to shop in the virtual space. (Source: Retail Dive) McKinsey & Company estimates the metaverse will generate up to $5T by 2023, though the impact varies by industry, with an estimated $2-2.6T impact on ecommerce (Source: Retail Dive)
Social shopping – transactions that take place entirely within the social media platform – is on the rise. It is set to value $1.2T by 2025, and unsurprisingly, growth will be driven predominantly by Millennial and Gen Z consumers, who will account for 62% of all spending (Source: Forbes)
Supply and Labor Shortage – Updates
Despite the unpredictability of supply chain challenges, retailers and consumers are more familiar with the impacts. Developing contingency plans and clear communications with shoppers have become a must in the current landscape.
Nearly 70% of consumers indicated labor shortages have caused reactive changes to their purchases in the past six months, whether going to a different retailer to eliminating the planned purchase all together. (Source: NPD)
Swings in inventory levels are behind a lot of the volatility in GPD, and forecasters view increasing inventories as a possible indication of an upcoming recession. Nevertheless, increasing inventory levels is an investment. (Source: Forbes)
As it was in 2021, the ongoing supply chain crisis is a key motivator for consumers to start their holiday shopping early – 51% of consumers are concerned about a potential lack of inventory and 45% of shoppers are worried about slow shipping times (Source: Sound Commerce)
Q2 Digital Creative
This quarter’s digital creative saw a joyful introduction to Summer 2022 with consumers enthusiastically welcoming travel, celebrating mom and dad, and honoring causes that matter to them
Get Going for the Summer
Despite an uncertain economic outlook, consumers were eager to get going for the summer as more sought to travel, attend in-person gatherings, and make up for lost social time.
Brands were excited to meet consumers where they went!
Celebrating Pride Month
This year, we saw more brands taking initiative to not only celebrate Pride Month but also to take action and get involved
Athletic Brewing Company and Backcountry were among the brands that worked with organizations and nonprofits to support the LGBTQIA+ community
Brands Speak Up
Brands also spoke up and addressed issues that matter
In an email to their community, Hatch teamed up with Lalo and Union Square Play to support those affected by the national baby formula shortage
Memorial Day Offers
Memorial Day offerings ranged from promotions to limited edition products
Mother’s Day – All About Mom
To celebrate Mother’s Day, brands shared gifting ideas to give mom the self-care day she deserves
Father’s Day – Thinking of Dad
Brands gave a shoutout to dads and made it easy for consumers with creative gift guides
