Consumer trends, retailers’ plans and more
Long before Halloween candy goes on sale, retailers are beginning to put out their holiday merchandise and offer deals targeting early shoppers. Is this the new normal? Are shoppers ready? What role does the economy play? Read on for answers to commonly asked questions about the holiday shopping season.
Why are retailers offering holiday deals in October?
Retailers are responding to consumer demand by starting deals and promotions for winter holiday merchandise earlier in the year. That also allows consumers to spread out their budget over a longer period of time and search for the best deal for their holiday purchases.
This year, retailers moved up their peak shipping season to allow for additional time to bring in products for the winter holiday season. According to NRF’s latest consumer survey, 44% of holiday shoppers say it’s better to purchase gifts and other seasonal items now because they believe inflation will continue to impact prices later in the year. Another 31% believe it’s best to purchase items now because the deals won’t get any better.
Is Black Friday still important?
Black Friday and Cyber Monday are part of the five-day shopping event that begins on Thanksgiving Day and continues through the following Monday. Typically, these five days represent some of the busiest shopping days of the year as consumers browse and buy online, in stores and, increasingly, on smartphones and other mobile devices.
Consumer behavior has shifted in recent years, with many consumers preferring to spread their shopping out over the entire season. Retailers have adapted to ensure they are meeting consumers when and how they want to shop. Some might choose to close on Thanksgiving Day; others spread out their “Black Friday” deals; and others will be featuring the same deals both in stores and online throughout the holiday season.
However, for many consumers Thanksgiving weekend shopping is not just about the sales — it’s a tradition or something to do with friends and family over the holiday season. With COVID-19 taking a backseat in many consumers’ minds this year, they might be more eager than ever to embrace pre-pandemic norms and ways of celebrating.
According to a September 2022 poll conducted by NRF and Prosper Insights & Analytics, 45% of holiday shoppers say they are likely to browse and buy in stores on Black Friday this year.
Will holiday sales change as the season progresses?
Retailers adjust their promotion strategies and marketing calendars to meet consumer demand. For many, that could mean launching holiday sales early or understanding that promotions and sales might be even more important to consumers this year, in light of inflation and higher cost of living.
NRF and Prosper Insights & Analytics’ annual September survey showed that 58% of holiday shoppers also say that sales and promotions are more important to them when shopping for gifts and other holiday items this year compared with last year. This is up significantly from 48% in September 2021.
What impact will inflation have on holiday spending?
Higher prices and inflation are top of mind for holiday shoppers. However, many consumers plan to prioritize holiday gifts and celebrations even if it means cutting back in other areas or shopping early.
An NRF survey of 2,000 consumers conducted in late September found that 62% of holiday shoppers agree that it is important to spend on holiday gifts and celebrations. And they will do what they need to, even cutting back in other areas, so their loved ones can celebrate like they always do.
However, 43% of consumers say they don’t earn enough to cover the costs of gifts and other holiday items this year. These shoppers are looking for other ways to supplement their income, including dipping into savings (40%), taking on credit card debt (32%), using services like buy now, pay later (25%) and selling assets (22%).
What are retailers’ hiring plans this holiday season?
Retailers are preparing for early holiday shopping. Meanwhile, the labor market is still not functioning anywhere close to normal as it did prior to the pandemic. Available workers have been hard to find to match job openings.
It is important to note that retail employment levels are very robust right now. Retail added 44,000 jobs in August and employment in August was the highest number we’ve seen in the last five years. Retail employment has increased more than 800,000 in the last two years and is up more than 2.5 million since the peak of the pandemic.
Retailers and delivery companies are preparing for a peak shopping season by hiring seasonal workers and offering thousands of jobs. However, retailers might feel that at current levels, heavy holiday hiring may not be necessary. Hiring this holiday season is likely to also reflect that many seasonal workers from last year’s holiday period became permanent employees.
There is also some caution as the overall economy is growing at a much slower pace than the same time last year.
How will supply chain disruptions affect this year’s holiday season?
Retailers started planning early on for the busy holiday shopping season. They have been learning from the ongoing supply chain disruptions and implementing mitigation strategies.
Many retailers decided to move up their holiday shipping season and brought products in earlier than normal to ensure they would have products available for consumers. Some also shifted to the East Coast/Gulf Coast ports to avoid potential disruptions on the West Coast because of the ongoing labor contract negotiations.
Source: National Retail Federation