As the holiday season approaches, so do the predictions about how much we'll spend, and what we'll spend it on. Is Black Friday dying?
You know the holiday season is almost here when economists and forecasters start predicting just how much we’ll spend on gifts – and they all contradict each other. Take a look at these reports from last week…
- “After a ho-hum 2009 and a disastrous 2008, holiday retail sales are expected to increase a more moderate 2.3 percent this year,” proclaims the National Retail Federation.
- “In almost every category this year, there is a drop-off in intended purchases,” cautions market research firm NPD Group.
- “The overwhelming majority of shoppers will maintain a tight grip on their wallets as they hit the stores this holiday season, with 83 percent expecting to spend the same or less on holiday gifts compared to 2009,” suggests business consulting firm Accenture.
Even though the experts don’t know exactly what will happen by the end of the holiday shopping season, their reports give the rest of us some tips on what to do – and not do – at the beginning.
For instance, all three reports make the obvious prediction that consumers will be bargain-hunting this holiday season. “The primary influence on where consumers will shop for gifts this year remains price,” says NDP Group. And since these reports are widely read by businesses that set those prices, that’s good news for us. But NDP is not advising retailers to slash prices on clothes.
Clothing may not come cheap
“In apparel, I think it is important to point out that the drop-off in intentions doesn’t necessarily mean a significant decline in apparel sales,” says Marshal Cohen, NDP’s chief industry analyst. Cohen explains it like this…
Consumers tend to fall back on their “old faithful” items, like apparel, especially when there are no “new” items or “hot” categories. And so far there are only some updated re-runs of the same old product. These may be “want-to-have” items, but there aren’t any “must-have” items, at least not yet.
Here’s another reason to double-check those prices on clothing: According to the Accenture study, holiday shoppers plan to spend more on clothes (57 percent) than anything else – including toys (41 percent). So the law of supply and demand suggests prices for clothing may not be as deeply discounted as other items. In addition, high cotton prices may be reflected in higher clothing prices: see our recent story Expect Higher Holiday Prices for T-Shirts and Jeans.
Gift cards will be popular
Without one hot new toy or tech gadget for the holiday season, what will be the second most-popular present after clothing? Gift cards. Accenture says 57 percent of us will buy one as present, while “44 percent of consumers will buy up to three gift cards, and 85 percent will spend up to $50 on each gift card.”
Gift cards seem like a great convenience, but as we’ve written about before, be careful. Here are Five Things to Know About Gift Cards. And if you get a gift card you don’t want, here’s how to Get the Most From Your Unwanted Gift Cards.
Black Friday every day?
Accenture says more holiday shoppers (53 percent) will skip Black Friday – the day after Thanksgiving that marks the start of the holiday shopping season – than fight the crowds for deals. And the National Retail Federation’s chief economist Jack Kleinhenz predicts, “Retailers are expected to compensate for this fundamental shift in shopper mentality by offering significant promotions throughout the holiday season and emphasizing value throughout their marketing efforts.”
That’s good news for those of us who don’t relish the idea of parking our cars on the edges of our local malls and burning our Thanksgiving Day calories elbowing our neighbors for great deals.
“The growing ambivalence toward the traditional Black Friday shopping trip is being driven by a number of factors,” says Janet Hoffman, managing director of Accenture’s retail practice. “The increase in the number of homes with broadband Internet access means that many shoppers will prefer to stay at home and bag the offers online rather than brave the crowds.”
But here’s the scariest prediction of all, also from Hoffman: “Holiday shopping is now a 24/7 event.” Ho oh no…