"Though the foundation for solid holiday season growth exists, Americans are questioning the stability of our economy, our government and their own finances."
When it comes to retailers pulling out the stops to influence consumer shopping trends, the more things change, the more they stay the same. Consider this retailer’s ad unearthed by Slate.com writer Paul Collins: “KEEP IT IN MIND! It is needless to remind you that CHRISTMAS IS COMING, but we want everybody who intends purchasing CHRISTMAS PRESENTS to comprehend that we are now all ready to show you the finest assortment ever exhibited, for our NEW STOCK ...”
That ad ran in 1885.
This year, a late Thanksgiving coupled with consumer insecurity over the economy and subsequent lackluster holiday shopping forecasts are compelling retailers to step up their marketing campaigns to salvage the year’s biggest and most important shopping season that can account for up to 40 percent of a retailer’s revenue.
The National Retail Federation’s annual survey of holiday consumer shopping trends projects the average holiday shopper will spend $737.95 on gifts, holiday décor, greeting cards and more, two percent less than they actually spent last year. The NRF, the world’s largest retail trade association, forecasts holiday sales will increase 3.9 percent to $602.1 billion.
For the first time, the NRF asked holiday shoppers if political gridlock in Washington would affect their holiday spending plans. On average, 29 percent of respondents said the situation would somewhat or very likely affect their spending plans. Nearly one-third of those between the ages of 55 and 64 said political gridlock in Washington was somewhat or very likely to affect their spending, the highest percent among all age groups surveyed. When asked specifically about the overall state of the economy and how it would affect their spending plans, more than half (51 percent) of respondents said the economy would in some way impact how they spend this holiday season. Specifically, 79.5 percent plan to spend less overall, looking to cut corners and tighten budgets where they can.
“Though the foundation for solid holiday season growth exists, Americans are questioning the stability of our economy, our government and their own finances,” said NRF President and CEO Matthew Shay, in a statement. “We expect consumers to set a modest budget for gifts and other holiday related purchases as they wait and see what will become of the U.S. economy in the coming months.
Gallup has issued a similarly conservative holiday consumer spending trends forecast, projecting that what Americans spend on Christmas gifts this year will be similar to their holiday spending estimates in each of the past two years. “Even if Americans' spending intentions hold at the current level into November, Gallup's model suggests that 2013 holiday spending is likely to grow by between 3.7 percent and 4.0 percent over last year's level,” the organization reported in a statement. “That is not as strong as the growth in holiday spending in 2010 and 2011, but roughly comparable to 2012 and slightly above the average 3.3 percent increase of the last 10 years, as calculated by the National Retail Federation.”
In a bid to remain competitive and get their share of consumers’ money before they spend it elsewhere, several of the nation’s largest retailers, including Macy’s, K-Mart, J.C. Penny and Kohl’s are opening their doors on Thanksgiving. Traditionally, the day after Thanksgiving, known as Black Friday, so named by hopeful retailers that sales will push them into the black, has marked the start of the Christmas shopping season. How the earlier starting line will affect Black Friday sales will be closely watched.
Affluent investors surveyed by Spectrem’s Millionaire Corner did not get the memo. More than three-fourths (78 percent) said they did not plan to shop on Black Friday, according to a new survey. Of those who do plan to shop on Black Friday, the highest percentage (40 percent) anticipate spending between $200 and $499, while 22 percent project they will spend between $100-$199.
The increasingly popular Cyber Monday, too, looks to be impacted by the earlier start to this year’s shopping season. Walmart anticipated Black Friday and Cyber Monday with an early online sales event in the first week of November. An American Express survey of consumer shopping trends indicates that more shoppers plan to take advantage of Cyber Monday online deals over Black Friday sales.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.