Retailers are also pushing in-store sales because of the growing costs of returns from ecommerce orders. Amazon, Walmart, and Macy’s have cracked down on return policies that don’t allow consumers to return too many items—partly because retailers lose significant amounts of money from shipping products that are later returned. Cohen expects retailers to limit how many products people can buy online.
Still, many consumers turn to ecommerce because it allows them to more easily compare prices across retailers, using browser extension tools like Honey or Rakuten, noted Brittany Steiger, principal retail and ecommerce analyst at Mintel.
“A deal-seeking mentality definitely has the potential to shift more holiday shoppers toward ecommerce,” Steiger said.
According to the firm’s research, 63% of holiday shoppers say they get better deals online versus in-store, and 69% prefer to shop online during sales events like Black Friday.
Ecommerce will drive low-price products
For several years, ecommerce retailers have consistently begun running holiday deals earlier in summer and fall to capture early holiday shopping.
Expect those promotions to start even earlier this year with consumers spending less, said SageBerry Consulting’s Dennis.
“If you think it’s going to be a challenging holiday season, then you move early because consumers only have so much to spend,” he said.
In terms of what gifts people will be buying online, brands can expect to see high sales of low-price commodity products that people don’t need to see in a store to buy, like coffeemakers. “It’s search-driven, not discovery-driven,” Dennis said.
And Amazon’s dominance in ecommerce is likely to continue.
“So many people are locked into the Amazon ecosystem,” Dennis said. “Because of that behavior, sales tend to be in the lower-price range.”
One way retailers will likely attempt to differentiate those discounts is through increased personalization, noted Mintel’s Steiger—another strategy that Amazon pioneered that omnichannel retailers are clamoring to mimic.
“Retailers are growing their arsenal of tools with AI and retail media networks that allow them to better tap into shopper data to further optimize the experience,” Steiger said. “We’re going to see a lot more targeted, personalized offer messaging that moves beyond blanket promotions and discounts.”