As the 2022 holiday season concludes, we’re seeing interesting trends across the retail sector. Despite multiple macroeconomic factors and CPI inflation, the retail sector looks strong, with consumers shopping for the holidays. Reuters recently stated that retail sales increased by 1.3 percent in October. Similarly, the U.S. Census Bureau reported that total sales for August 2022 through October 2022 rose 8.9 percent compared to the same period in 2021. Consumers are spending, yet at the same time they’re feeling the pinch in their wallets due to higher prices and inflation.

Retailers have adapted to an evolving industry, one where consumers are empowered with more product information than ever. With the COVID-19 pandemic mostly in the rearview mirror, consumers have kept some of their digital shopping habits and shifted to more of a hybrid model which combines both in-person and online shopping. For retailers to thrive, they should focus on three key areas to engage with customers: recognizing how consumers perceive value with their brand, improving omnichannel management, and providing flexible payment options.

Recognize How Consumers Perceive Value

We know consumers are willing to prioritize unique, memorable experiences that draw them back into the store. Whether it’s leveraging advanced payment technologies that simplify payments, such as digital wallets, or providing ways to make it easier for customers to find the products they’re looking for, every retailer should focus on providing seamless customer experiences and unique brand value. Synchrony regularly connects with consumers about their shopping preferences, and many tell us they’re interested in supporting local retailers, depending on their priorities.

We also know that with inflation and other household budget pressures this year, almost half (46 percent) of consumers in Synchrony’s Monthly Consumer Tracker planned to wait for items to go on sale before purchasing, while half (50 percent) were spreading out or timing their holiday purchases this year to manage budgets. It feels that all it all comes down to balancing and prioritizing — in some cases consumers will prioritize a brand, cause or convenience, and in some cases it comes down to getting the best deal.

Improve Omnichannel Management

Creating a seamless omnichannel experience has gone from a differentiator to a must-have as consumer expectations have grown. Companies with robust omnichannel customer engagement retain on average 89 percent of their customers compared to the customer retention rate of 33 percent for companies with weak omnichannel customer engagement. The beauty of a tightly integrated omnichannel management program is that it makes life incredibly easy for customers.

Customers can research products online — in fact, 81 percent of retail shoppers conduct online research before buying — which helps them make better decisions that fit their needs. For example, parents can review a video game console for their children online or on their mobile device, then buy it right there, or go to the store knowing exactly what item they want to purchase. The ability to comparison shop and read product reviews in real time has changed the entire customer journey, with consumers actively looking up products while shopping in-store as well.

At Synchrony, we bring our customer data together across a journey to ensure we’re bringing them our best every day. This approach to customer journeys helps us evaluate where we can do better — whether it’s a particular experience or channel — and focus our efforts on improving that. The same approach can be applied in retail, and Synchrony actively works with partners on this cycle of improving our joint experiences in shopping and payments.

Provide Flexible Payment Options

Customers are carefully managing their spending habits, which means that retailers should offer a variety of payment options to meet each customer’s unique needs. Some may be open to a number of payment methods and are seeking out the convenience of a digital wallet or stored payment option at online checkout. In some cases, consumers will be looking for financing options such as a credit card with promotional financing or an installment loan that sales associates can share at the point of sale. Ultimately, the payment interaction is a critical aspect of the consumer shopping experience, and an opportunity to delight the customer with choice, value and convenience.

Lean Into Every Experience and Increase Customer Loyalty

This holiday season, consumers have continued to spend, albeit with an increased emphasis on budgeting. For retailers looking to build brand loyalty, focus on providing unique customer value, improving omnichannel management, and offering a variety of payment options. These strategies help with creating an excellent shopping experience that can turn new customers into brand advocates.