Ho, Ho, Uh-Oh: 2022’s Holiday Challenges

Key highlights:

  • Retail: How can retail stores adapt their experiences to grow with consumers changing habits?

  • Restaurants: Utilize technology to help fill staff shortage gaps and deliver an exceptional experience.

  • Grocery: Combat supply chain gaps by being creative and anticipating shortages.

  • Travel & Hospitality: Prioritize your staff, cybersecurity, and cleanliness efforts to improve the experience of your growing number of guests.

With the aftermath of COVID-19, supply chain issues, staffing shortages, and rising inflation, 2022 has presented many challenges for businesses across all industries. Not only did the pandemic directly affect businesses’ traffic and income, it threw a wrench in predictable consumer behavior, making trends harder to predict than ever before. As 2022’s holiday season steadily approaches, the pressure is on and businesses are relying on a successful season to continue healing from the pandemic’s damages. Check out our predictions for issues each industry might face, and how to best tackle them.


Retail


Before 2020, most Americans’ holiday shopping usually took place in big retail chains bustling with shoppers, shining bright with holiday lights, and overflowing with wintry goodies and December discounts. The pandemic’s in-person restrictions, supply chain issues, and chronic staffing challenges shook up holiday shopping and redefined the annual experience.


Start sales early


In regards to the external factors influencing the behavior of 2022 holiday shoppers, COVID-19 have been replaced by individual financial concerns, broader economic uncertainties, inventory issues, and staffing shortages. According to a recent report by Emodo Institute, 45% of shoppers say their holiday planning’s been delayed by the current state of the economy, and 49% expect to spend less money this season than last year. According to the National Retail Federation, the percentage of consumers who have started their holiday shopping by early November has been slowly rising over the last

decade, reaching its highest peak to date

– 61% – in 2021.


With financial uncertainties lingering and an impending recession looming, consumers are starting to holiday-shop earlier. To spread out their spending and take advantage of all the discounts and deals they can. Furthermore, in response to the ongoing supply chain crisis, customers want to make sure they can get everything they need in time for the holidays.


Supply chain delays created an excess of inventory that consumers have moved on from, and not enough inventory for products that they’re currently demanding. These peaks and valleys in inventory forced some retailers to clear out excess goods to make room for what customers really want, and slapping major discounts on the products they need to get rid of. The retailers that will see the most profit are the ones who put out their sales earlier rather than later.


Take care of employees


Working in retail during its busiest time of year can take a massive toll on frontline employees, especially in the aftermath of a pandemic. Regular tokens of appreciation can make all the difference between being well prepared for the holiday rush and being understaffed.


Make sure they have the breaks they need, stock break rooms with free snacks and water bottles, invite them on a pre- or post-holiday retreat or throw a holiday party with raffle tickets and prizes. Don’t be shy about telling employees when they’re doing a great job. Staff as generously as you can to make sure you’re not stretching your employees too thin. Customer-facing employees are often the first human touchpoint for your business, so keeping employees happy ensures positive customer experiences in critical moments.


Optimize online – and in-store


Store visits were up from 2020 but still down nearly 20% from 2019. Online holiday sales grew 8.6% between 2020 and 2021, with 57% of consumers holiday-shopping online. Post-COVID-19, customers are used to getting everything they need in the comfort of their own homes on their laptops, tablets, or mobile phones. Make sure all the resources they’ll need to complete their shopping experience are available, functional, and intuitive to use on your website and social media accounts. The easier and more enjoyable your customers’ shopping experience is, the more likely it is they’ll make a return visit. This applies to in-store shopping, too.


As COVID-19 concerns fade, more customers are returning to stores – and it’s important to make a good impression when they do. Decorate your storefronts for the holidays, create engaging displays for on-sale or featured products, and spend extra time training employees to be helpful, efficient, and welcoming during the hustle-and-bustle of the holiday rush. Do everything you can to remind customers what they missed about shopping in-store.


Make it easy


Due to the creative problem-solving companies had to do to stay in business during the pandemic – from curbside pickup to virtual clothing try-ons – shoppers now highly value flexibility and options when it comes to shopping, online or in-person. Do whatever you can to make shopping with you as seamless as possible: in-store pickup options, same-day home delivery, free returns, apps for mobile devices, customer service bots ready to help on your website’s homepage – get creative.


94% of consumers expect to be influenced in their shopping through the online media channels they use. Make it easy for them to shop on social media platforms so they don’t even have to leave their favorite apps while buying your products. Invest in influencer marketing and paid digital ads based on which demographics you’d like to target: for Gen Z, find TikTok influencers to promote your business. For the 50-and-up crowd, focus efforts on Facebook. Identify which audience you’re trying to reach, and find out where they are.


Restaurants


Inflation has impacted every business sector in America, and the food service industry is no exception. March 2022’s USDA Food Price Outlook predicted that food in restaurants and other foodservice venues would rise 5.5% to 6.5% this year. But staffing shortages also mean that customers don’t always receive top-notch service to justify the higher costs.


Post-pandemic recovery has proven difficult for restaurants across the country on the staffing front, and keeping enough frontline employees continues to be a major challenge. Over the course of 2022, mentions of insufficient staffing in Yelp reviews have increased 340%. As the busy holiday season approaches, restaurants need to strategize a plan to make the most of the staff they have and, in economically strenuous times, make sure guests feel like dining at their establishment is worth the cost.


Embrace current staff (and fill in gaps with tech)


Keep the employees you have with seasonal bonuses, thank-you gifts, and verbal expressions of gratitude for their hard work. Whatever you can manage to make them feel valued and appreciated will shine through in their service. Make their jobs easier by leaning into tech solutions where you can: consider investing in self-serve kiosks, setting up an online reservation-booking system, or even trying out delivery bots like Starship.


Experiential details matter


The pandemic got Americans very used to cooking and eating at home, so diners today are going to restaurants just as much for the experience as the food that they order. Rose Votta, general manager of Frasca Food and Wine (the most recent recipient of the James Beard award for national outstanding service) says, “hospitality is free,” and we couldn’t agree more. It doesn’t cost anything to give guests an incredible experience from start to finish with thoughtful customer service that keeps them happy from drinks to dessert.


When it comes to creating an unforgettable experience, Channel our LIVE 8 principals and consider the micro moments you can create to put people first. Encourage chefs to use the scraps they’d toss otherwise to make free treats for guests to enjoy upon arrival (like citrus- or cucumber-infused water, or a bite-sized sample of a special menu item). For patio diners, provide hand warmers in the chillier months. Make reservations seamless with text notifications and online check-in. There are so many little things you can do to make guests feel extra taken care of.


Boost your online resources


The number one complaint long-time Washington Post food critic Tom Sietsema gets from readers is that restaurant websites often offer minimal and basic information. In a day-and-age when consumers expect to be able to do, see, and get anything they want online, your restaurant’s information needs to be accessible to potential customers. Losing business could be as simple as a tricky-to-find “order online” button on your website.


Proactively address customer questions and concerns on your website and socials. What would you want to know as a potential diner? Show photos of your outdoor seating area – is it heated or covered? Do you have gluten-free or vegan options? What are your holiday hours? Create a seamless customer experience before they’ve stepped foot in your restaurant by optimizing your online presence.


Grocery


Labor shortages and supply chain issues are to blame for most of the product shortages – as Jim Dudlicek, a representative for the National Grocers Association, says, there just aren’t enough people to “make the goods, move the goods and sell the goods.” Russia’s invasion of Ukraine has also played a major role in the disruption of Europe’s supply chains and a shortage in the imports the US usually receives from them. Demand for groceries is also higher

than usual because of the pandemic-sparked

boost of people cooking and eating at home.


With the holiday season approaching, the demand for holiday-meal ingredients is about to skyrocket. According to recent research from Kroger-owned data company 84.51°, 94% of grocery shoppers plan to gather for the 2022 holidays with an equal or higher number of people as in 2021. Prioritize optimizing your customers’ experience where you can, even if you can’t provide every ingredient on their list.


Stretch pennies


With national inflation rising and shortages boosting product prices, helping shoppers save money where they can will make a big difference in their shopping experiences this year. 45% of shoppers don’t feel they need to buy a specific brand of holiday food, so try promoting the less expensive generic options your chain offers. 57% of customers are looking for sales, deals and coupons more often as prices increase, so send in-mail coupons, email discount codes to store members, and offer specials on holiday favorites. If your shoppers know they can count on you to save them money, they’ll want to shop with you again long after the holiday season ends.


Offer creative ingredient alternatives


Due to supply chain issues, various current political events, and certain shortages (like aluminum), many grocery stores are anticipating product shortages during 2022’s holiday season. In 2020 and 2021 certain broad types of products, like paper goods, were out of stock because of customer stockpiling. This year, the products expected to be in low supply are more random and span across many different categories.


These are the products expected to be in short-supply:

  • Chickpeas

  • Wheat

  • Sugar

  • Avocados

  • Paper goods

  • Canned goods

  • Eggs & meat

  • Pet food

  • Baby formula

  • Champagne, wine & beer

If your store is out of a high-demand product, try putting specials on alternative products or featuring them on end-caps to solve shoppers’ problems quickly. If you’re out of white sugar, deck out an end-cap with brown sugar instead and stock it with copies of popular holiday recipes using brown sugar as a replacement for white. 2022 has presented a host of challenges to companies and their customers, but at the end of the day, we’re all in it together.


Travel & Hospitality


It’s not news that the last few years have seen incredibly low travel rates due to the COVID-19 pandemic. But as COVID concerns begin to lessen, we should see travel rebound this season. According to Phil Dengler, co-founder of The Vacationer, 2022 holiday season travel numbers will be lower than 2019’s but considerably higher than 2021’s and 2020’s totals.


Staff, staff, staff


This is the main issue all travel companies are currently facing. In summer 2022 many Americans were ready to travel again – so many, in fact, that there weren’t enough pilots to support the demand, leading to chronic flight delays and cancellations. Because pilots don’t grow on trees, it’s expected for this issue to continue into the holidays. In an effort to recruit new employees, try hosting job fairs, boosting employee benefits, and offering sign-on bonuses. Don’t forget to show your current staff they’re valued, and go above and beyond to make sure you keep the great employees you already have.


Prioritize cybersecurity


Hotels possess incredibly sensitive information about their customers, but cybersecurity in these industries has yet to be perfected: hospitality has the second most cybersecurity breaches of all industries (after retail). You want your guests to trust you, and to feel safe enough with you – before, during and after their stay – that they’ll make a repeat visit. The more guests you have, the more valuable data you have as well and the more likely your business is to be the target of a cyberattack, so take the necessary precautions in protecting their data before the busy holiday season starts.


Communicate cleanliness efforts


Although many travelers are less concerned about COVID-19 this year than in 2020 and 2021, there is still the lingering concern of transmission, especially when visiting more vulnerable family members for the holiday season. Communicate to your guests and travelers that you are still doing everything you can to minimize risk of transmission and to keep themselves and their families safe. Consider adding an easily found page on your company website about the precautions your business is taking so that any potential customers are put at ease during their booking deliberations. Supply masks and have hand sanitizer at the ready for those who are still easing slowly into post-pandemic life.


While we are still living in unprecedented times in many ways, the joy of the holiday season is a comforting constant in the lives of many. The more you can do to prepare your business for success during its hustle and bustle, the more you’ll be able to contribute to your customers’ – and your employees’ – happy holidays.