- 66% of consumers surveyed say they'll be more concerned about the economy this holiday season.
- 58% plan to start holiday shopping before November.
- 73% said they are considering sustainability when shopping for the holidays.
ARMONK, N.Y., Oct. 17, 2022 /PRNewswire/ -- According to the annual global holiday shopping and travel report released by IBM's (NYSE: IBM) Institute for Business Value (IBV) today, many global consumers are ready to celebrate the holidays again and will be shopping earlier than in years past. However, as a wider set of economic and political issues took center stage this past year, new risks, and uncertainty loom over their plans.
The study found that 2022 shopping budgets are up 8% over 2021—in line with Bain's economic forecast—and holiday travel budgets are up by almost half. However, factors including inflation and price increases have made economic concerns top of mind this holiday season. While 59% of consumers surveyed say they will be less concerned about COVID-19, two in three say they will be more concerned about the economy. 59% of respondents report worrying more about supply chain disruptions that could make holiday shopping harder or more expensive.
"According to the survey results, in 2022, consumers are hoping to re-embrace holiday traditions they've had to alter for the past two years," said Karl Haller, Partner, Consumer Center of Competency Leader, IBM Consulting. "They're starting their shopping and travel planning earlier but also want to hedge their bets with options like free returns or cancellations. To adapt to these changes in consumer behavior, retailers will need better visibility and traceability across product inventory, fulfillment, and returns. AI can help them understand, prioritize, and resolve critical issues in real time."
Other noteworthy findings include:
Uncertainty around inflation, gas prices, and supply chain is driving consumer plans
As COVID-19 pandemic concerns abate for many consumers, worries are shifting towards uncertain economic and supply chain conditions this holiday season.
- Nearly half of consumers surveyed will spend less if inflation continues to drive price increases. If they're forced to cut their holiday shopping budget, over 60% will cut the non-essential categories like apparel, footwear, jewelry, and accessories.
- If goods are not available due to supply chain issues, 41% of respondents say they will spend less – but 30% will spend more if they can find substitutions easily.
- If gas prices go down, 35% of consumers surveyed will do more in-store shopping.
Consumers are making travel and shopping plans earlier but they want to keep their options open
Continuing the shift away from the traditional Black Friday start of the shopping season, 58% of consumers surveyed plan to start holiday shopping before November, compared to 44% last year. Almost two in three plan to pre-order this holiday season to get their products on-time with guaranteed prices.
At the same time, consumers want to keep their options open. Nearly seven in ten respondents surveyed will opt for brands or retailers that offer free cancellations, order changes, and returns, as well as a COVID-19-safe environment this holiday season. The study findings seem to indicate these perks are often worth the price due to the continued worries around supply chain and product availability this season.
Travel is also an area where consumers are looking to get back to normal, while still mitigating any risk associated with potential price changes due to inflation and fluctuating gas prices. The study found that average travel demand will go up by 9% during the holiday season and 78% of consumers surveyed are planning to purchase their airfare before October (61%) or in October (17%).
Sustainability remains top-of-mind for majority of respondents despite economic hardships
Consistent with last year's report, sustainability remains top-of-mind for consumers surveyed globally. "As more consumers align their purchases with their values, retailers and brands that can provide more environmentally-friendly options could potentially earn a greater share of holiday spend," said Haller.
Three fourths (73%) of respondents said they are considering sustainability when shopping for the holidays. Twenty-nine percent of consumers surveyed will bundle multiple orders to help reduce carbon emissions, while 38% will avoid single-use plastics, and two in five will choose to shop nearby (42%), and buy products that are branded as being environmentally sustainable or socially responsible (41%). Notably, respondents surveyed are willing to pay an average premium of 41% for sustainable products, 34% for sustainable air travel, and 37% for sustainable lodging this holiday season.
IBV Study Methodology
To better understand consumer perspectives, as well as their plans to shop and travel this holiday season, the IBM Institute for Business Value (IBV) surveyed more than 12,000 adults across nine countries (Brazil, Canada, France, Germany, India, Mexico, Spain, United Kingdom, United States) in August 2022.
The full study is available at: https://www.ibm.com/thought-leadership/institute-business-value/report/2022-holiday-shopping-travel
About the IBM Institute for Business Value
For two decades, the IBM Institute for Business Value has served as the thought leadership think tank for IBM. What inspires us is producing research-backed, technology-informed strategic insights that help leaders make smarter business decisions. From our unique position at the intersection of business, technology, and society, we survey, interview, and engage with thousands of executives, consumers, and experts each year, synthesizing their perspectives into credible, inspiring, and actionable insights. To stay connected and informed, sign up to receive IBV's email newsletter at ibm.com/ibv. You can also follow @IBMIBV on Twitter or find us on LinkedIn at https://www.linkedin.com/showcase/ibm-institute-for-business-value/
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Two recent "state of cloud" reports offer advice on how to address the everlasting, crippling cloud skills dearth.
The inability to find IT pros with requisite cloud skills is persistently identified as a major challenge to organizations moving to cloud computing, as we have covered in recent articles like "Cloud Strategy Survey Highlights Skills Shortage, Cloud Overspend" and "IBM Cloud Study: 'Initial Excitement' Bends to Skills, Security, Compliance Challenges" and even articles from years ago like this 2018 article, "Report: 'Cloud and Distributed Computing' Are Skills Companies Need Most."
In fact, only 8 percent of global technologists have significant cloud-related skills and experience, says a recent "2022 State of Cloud Report" report from Pluralsight, a technology workforce development company known for its training courses.
That report, like many before it, identifies security skills as the most coveted in this age of rampant ransomware and other cybersecurity threats, though it also highlighted a need for database analytics, networking, machine learning and several other highly sought-after skills.
Pluralsight said security was the No. 1 obstacle preventing organizations from achieving cloud maturity. "When 40 percent of leaders and learners agree that security is the top skills gap, we have a serious problem," the company said in a blog post last month. "That is, unless you want to see your organization's name splashed across the headlines. Cloud computing is the future. That much is clear. But to provide consumers with reliable solutions, we have to prioritize security."
The 8 percent figure mentioned above led off Pluralsight's list of major takeaways from its report:
Pluralsight's report compiled survey results from more than 1,000 technologists and leaders in the United States, Europe, Australia and India on the most current trends and challenges in cloud strategy and learning.
A second report, "IBM Transformation Index: State of Cloud," also emphasized how crucial security concerns are. That report is designed to help organizations gauge how they fare against industry and local cloud norms in a variety of cloud areas. IBM said the report is based on its own research with more than 3,000 IT and business decision makers in 12 countries and 23 industries, revealing the areas where teams face the biggest challenges and opportunities. There, of course, security is also front and center, along with the skills gap.
"More than 90 percent of financial services, telecommunications and government organizations who responded have adopted security tools such as confidential computing capabilities, multifactor authentication and others," IBM said in a Sept. 29 blog post. "However, gaps remain that prevent organizations from driving innovation. In fact, 32 percent of respondents cite security as the top barrier for integrated workloads across environments, and more than 25 percent of respondents agree security concerns present a roadblock to achieving their cloud business goals.
"When it comes to managing their cloud applications, 69 percent of respondents say their team lacks the skills needed to be proficient. This, combined with each cloud generating its own operating silo, puts constraints on the efficiency and effectiveness of people's work."
The skills shortage was discussed further in the actual report, which said: "Cloud complexity continues to grow. Many IT teams lack the necessary cloud skills to manage this complexity successfully and will need to reskill, hire for new skills, or 'borrow' skills via free agents in a gig model. Almost seven out of 10 respondents say their organization's IT team lacks the skills to architect or manage cloud applications."
Both reports go into much greater detail about the talent dearth, cloud computing obstacles and much more, while also offering advice to organizations to address those issues.
When it comes to offering solutions to mitigate the cloud skills shortage, Pluralsight unsurprisingly emphasized training, or "upskilling."
To shrink skills gaps and reduce lost internal knowledge, the company said: "Employees need to be aligned with company strategy while they begin to upskill to build within your cloud structure. Institutional knowledge is hard to come by and critical to maintain, which means it's essential that you don't allow critical internal knowledge to leave with an employee if they leave your company. Providing upskilling tools and opportunities is a worthwhile investment, but an investment nonetheless, so take steps to assure it properly benefits your long-term goals."
Pluralsight said organizations can mitigate this risk in a few ways:
IBM, meanwhile, said that to develop a cadre of cloud-skilled resources and create a single effective hybrid cloud operating model, organizations should consider the following steps:
Other bullet lists of advice came from our May article, "How to Address Crippling Cloud Skills Shortage?"
That article features the above graphic from Deloitte and bullet lists from that company and others including McKinsey & Company, The Linux Foundation's Clyde Seepersad and others. Here are some samples:
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‘I want to increase the number of clients, also, not just wallet share,’ IBM CEO Arvind Krishna says at The Channel Company’s Best of Breed conference in Atlanta. ‘That means that we need your help. We are not going to go there directly at all.’
Under Arvind Krishna’s watch, IBM has decreased the number of direct customers from about 5,000 in 2020 to about 400, the CEO told a crowd Monday. And the tech giant plans to leave potential new clients to partners.
“I want to increase the number of clients, also, not just wallet share,” Krishna said. “That means that we need your help. We are not going to go there directly at all.”
The CEO of Armonk, N.Y.-based IBM discussed his company’s investment in partners, the integration of subsidiary Red Hat, encouraged partners to raise their prices given the inflationary economic environment and even weighed in on chipmaker Broadcom‘s pending acquisition of cloud vendor VMware at CRN parent The Channel Company’s 2022 XChange Best of Breed (BoB) conference in Atlanta.
Krishna was on stage responding to questions from The Channel Company Founding Partner Robert Faletra and CRN Executive Editor of News Steven Burke.
[RELATED: IBM Assimilates Red Hat Storage Technology Into Own Storage Business]
Mark Wyllie, CEO of Boca Raton, Fla.-based IBM partner Flagship Solutions Group, told CRN in an interview that he’s glad to hear IBM plans to continue integrating different parts of the Red Hat business.
Earlier this month, IBM announced that it had absorbed storage technology and teams from its Red Hat business to combine them with IBM’s own storage business unit as a way to help clients take advantage of the two without requiring extra integration or having to deal with multiple sales teams.
Wyllie wants to see IBM further integrate Red Hat services into its portfolio to help partners push the services out to existing IBM customers.
“I think that’d be a benefit to us and IBM,” Wyllie said.
Red Hat’s autonomy within IBM has been essential to its position as an open source software vendor. Krishna clarified Monday that the Red Hat brand will stay in areas where it has a stronger brand than IBM. For storage, “maybe we already have a storage channel, which Red Hat kind of didn’t,” Krishna said.
He said IBM gave Red Hat more security and management capabilities after its acquisition in 2019. Partners can expect more integration between Red Hat and IBM in areas involving Linux.
“So if you can take maybe 50,000 Linux servers and consolidate them using OpenShift on LinuxOne, maybe that‘s a play to be made,” Krishna said. “There’s a few clients who have woken up to that and are doing it right now. So I think that’s going to be a really big play you’re going to see.”
During his talk, Krishna encouraged partners to explore more opportunities in IBM’s artificial intelligence operations (AIOps) offerings, including Turbonomic, Watson AIOps and Instana.
Customers will continue to spend on automation tools, he said.
“The ability to go into an enterprise and tell them, ‘Look, we can do things a lot more automated. We can take some cost out. We can do monitoring, and eventually go closed loop on AI’ – which I don‘t think is happening yet,” Krishna said. “I think is a massive opportunity given the current labor market.”
IBM’s security offerings, as well as Red Hat and containerization offerings, are also areas for partners to invest in, Krishna said.
As for Broadcom and VMware, Krishna said that VMware remains an important partner for his company. And as long as VMware keeps investing in its products, it should remain “a strong franchise.”
“I think it’ll come down to what is going to happen in 2023 and 2024,” Krishna said. “As long as they keep innovating on the products, they keep giving more function back to their clients – it’s a strong franchise. That falls away, then that‘s a different question. But I think the virtualization world likes those products. Now it’s up to them to keep innovating.”
Krishna also told partners they should raise prices to cover the growing cost of labor with such high inflation in the U.S.
“From our conversations with clients, I would tell you that nobody loves it, but they all understand,” he said. “Because most of our clients are doing the same out to their clients. … Pricing power comes down to something simple. Is the product highly valuable and is it sticky? … In a world of fewer skills, if you have the skills, you can price those skills.”
The MarketWatch News Department was not involved in the creation of this content.
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14. Research Finding and Conclusion
15. Methodology and Data Source
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