The no. 1 item on CardHub’s 2013 holiday wish list was a gift-wrapped package full of expert insights on the holiday shopping season. We must have been very good this year because Santa delivered early. And we’re ready to share it all with you.
2013 has been a tumultuous year for many Americans, with sequestration, the government shutdown, and now the uncertainties associated with Obamacare casting a long shadow over the impulse to spend freely.
Perhaps that is why the National Foundation for Credit Counseling (NFCC) is recommending that consumers give themselves the gift of of a debt-free holiday season this year. That may be a gift within reach too, as a recent NFCC poll indicates that 86% of holiday shoppers intend to spend either less than last year or nothing at all. Only 11% of respondents expect their spending to be in line with last year, and a mere 3% reported that their financial positions are strong enough to spend more than last year.
Signs of malaise can be found elsewhere as well. The Conference Board’s Consumer Confidence Index, for example, dropped over 10% between September and the end of October. A number of high-profile retailers have also issued guidance indicating they might not hit projected fourth quarter sales figures due to uninspiring consumer consumption trends. “It’s been a below-average year for retailers up to this point,” says Edward Fox, director of the JCPenney Center for Retail Excellence at Southern Methodist University.” And while the National Retail Federation (NRF) predicts an uptick in holiday spending relative to 2012, much of that can be attributed to inflation.
On the other hand, the stock market hit record highs this year, and a strong stock market tends to increase the discretionary spending of the wealthy.
Economic indicators aside, everyone agrees that e-commerce continues to be on the rise, with so-called omni-channel retailers enjoying a particular advantage. Those are the retailers that market their wares through multiple venues such as brick-and-mortar stores, online services, mobile devices, and catalogs. Gift cards will also continue to play a major role in holiday giving—no surprise there.
If you’ve looked at a calendar lately, however, it might have surprised you to see that there are only 26 days between Thanksgiving and Christmas this year. The two holidays cannot possibly get any closer together, and that’s going to put a squeeze on retailers. Some of the major outlets are responding by making the controversial decision to be open on Thanksgiving Day. Will that provide a new opportunity to bring in eager shoppers, or will it backfire? We’ll find out soon enough.
“What I see, and this is a continuation of a trend, is retailers really aggressively trying to get shoppers to shop early and commit their dollars early,” Fox recently told CardHub. “Retailers are being very aggressive in discounting so that they get the top-line sales they need, even though it’s a shortened holiday season.”
Ultimately, while we can all expect to hear jingle bells in the coming weeks, it’s fair to wonder if that sound is more likely to come from cash registers ringing up millions of purchases or from the loose change that people refuse to spend? There’s no clear consensus on that yet, but our experts have some very interesting observations to share.
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