Nobody knows how to interpret this holiday shopping season. It is worth billions of dollars.
Retailers hoped that this year would bring back sanity after two panic-plagued holiday seasons, which impacted doorbusters, party plans, and supply chains. Just as it seemed that stores and families could get out their old playbooks and begin to feel more normal, there was near-record inflation, and the conflict in Ukraine. This only increased the general anxiety about the world’s current state.
There are some positive signs. The pandemic is over, the supply chain has stabilized and the labor market appears strong.
In March, however, the Federal Reserve raised interest rates to slow inflation. Retail executives were also planning for what toys, wreaths, and fuzzy socks they would purchase in winter. Retailers stepped in early and often to ensure a strong shopping season. Costco received Christmas trees in August. Amazon hosted what was effectively a second Prime Day in October. Every day seems to have brought Black Friday ads, just like those Target had throughout October.
Despite this, shoppers are still confused. Do they need to buy now? Do you buy for many people or do you give priority to a few? Share items or experiences? Online deliveries are better than local ones.
Josh Silverman, Etsy’s chief executive, stated that it is impossible to predict whether consumers will spend more on gifts or more online.
Companies are now making predictions about the retail season, which amounts to a shrug.
“We don’t know how strong holiday spending will turn out compared to last year,” Brian Olsavsky (Amazon’s finance chief) told investors in October.”
Or, Peter Boneparth (chair of Kohl’s board) said this month to analysts, “I think everyone believes Christmas will come, however, I don’t believe anybody out there knows for certain exactly what’s happening.”
Everyone is concerned about inflation. People are rethinking what and who they buy for. Although inflation is decreasing, it’s still at its highest level since Indiana Jones bullwhipping the Lost Ark raiders at the mall cineplex.
According to the National Retail Federation, holiday sales will rise 6-8 percent over last year. In October, the annual inflation rate was 7.7 percent.
Melissa Burdick, who worked for Amazon for a decade and created Pacvue to help big brands sell online, said that “Folks really are looking for deals this year.” “They are shifting their buying habits to lower-priced brands, and more essential items,” she said. Now, I’ll buy chips on Amazon.
Two pandemic years of high-priced goods led to people spending over $1 trillion on their purchases. Last year’s holiday season saw the largest annual increase in retail spending since records began, with 14.1 percent growth due to stimulus checks, rising wages, and no place else to go.
Covid-19 travel restrictions are now less restrictive. Masking mandates have been virtually eliminated. As more people travel, attend concerts and dine out, retailers are worried about losing out on sales.
According to Eventbrite, screenings have increased by 33% compared to last year. Concert bookings have increased by 42%.