1 Dec 2022
This week: ‘Tis the season retailers have been waiting for. Will it live up to the hype?
Somehow it’s that time again. It seems like just yesterday we were complaining about Halloween decorations in August. But then autumn slipped into winter, and suddenly we realized we’ve been clench-smiling through Christmas carols since early November.
• It’s true: retailers have been getting ahead of the holiday swells this year by stocking their stuff earlier than usual. But can you blame them? With two years’ worth of pandemic slowdowns, supply chain hiccups, and sky-high inflation, hopeful indies have had to be strategic to get back on track. This holiday season looks a bit more leveled out in that regard, but still, the question on everyone’s mind seems to be: are shoppers back for good or will the market’s wobbles scare away the holiday cheer?
• The New York Times says, ehhh it’s anyone’s guess. “The truth is, we don’t know whether consumers will spend more or less on gift giving,” Etsy’s chief executive, Josh Silverman said recently. “We’re not quite sure how strong holiday spending will be versus last year,” Brian Olsavsky, Amazon’s finance chief chimed in. Peter Boneparth, the chair of Kohl’s board agreed, “I don’t think anybody out there knows for sure exactly what’s going to happen.” McKinsey offers a more official prognosis: “Tis the season to be cautiously optimistic.”
• One thing that’s for certain? Deals deals deals. Shoppers this year will be on the hunt for bargains, no matter the gift. “With wage rises struggling to keep up with inflation, higher prices have led households to tighten their belts when it comes to spending,” reports the BBC. High street giant Marks & Spencers has warned of a “gathering storm” as costs for retailers remain high while shoppers remain cautious. "M&S has done a valiant job of keeping the tills brisk and virtual baskets filled up with the right product mix, offering value ranges interwoven with treats," Susannah Streeter, senior analyst at Hargreaves Lansdown, told the BBC.
If this seems like the Ghost of Christmas Past, it’s because retailers have faced this shaky climate before. The moral of the story? Shops that come out on top will offer value above all else.
“Overall, holiday shopping is costing more, both online and in stores,” reports NPR. And yet, surveys have shown that families aren’t quite willing to scale back the gift exchange this year. Shopping habits are adapting to the times.
• The U.S. National Retail Federation expects shoppers to spend between 6 and 8 percent more than they did last year. The winning categories: necessities, luxury goods, and experiences. Adweek has called this high-low demand “the gifting spectrum” — or the idea that different customers are looking for different types of value. McKinsey found that despite inflation worries,“many [shoppers] have cash to spend—and they say they’re not just willing, but eager to spend and splurge.”
• Luxury shoppers in particular are going all out. A survey from ritzy retailer Saks found more than 75 percent of high-end shoppers say they plan to spend the same as or more than last year. Luxe giants like Estee Lauder, which bought Tom Ford for $2.8 billion last month, are giving their votes of confidence to the market ahead. At the same time, Yahoo reports that Buy Now Pay Later transactions grew by 120 percent for both online and in-person purchases, hinting that shoppers may be going to new lengths to cross off big ticket items on their wishlist. “Shoppers are embracing the buy now pay later payment method more this year to be able to buy desired gifts for family and friends” said Vivek Pandya, lead analyst for Adobe Digital Insights.
• “The experience is the thing” claims The New York Times. Trips, concerts, and experiential gifts are high on Santa’s list this year. “Retailers are bracing to lose out on spending as more people go on trips, attend concerts and eat out,” the NYT reports. But we beg to differ: small shops get ahead by providing a holiday shopping experience that’s an event in and of itself. Take the Watchpro Christmas Market, a three-day event featuring a variety of timepiece vendors in London this week. The market, which will have entertainment and hot drink pop-ups accompanying the activation, shows the best of the IRL holiday season experience.
That warm and fuzzy holiday feeling? That’s hard to conjure online. So while the outlook for retail this season may look wintry, small shops have a unique advantage to deliver on the simplest of shoppers’ holiday wishes: to eat, drink, and be merry.
Words by Nicola Pardy, a freelance writer and producer living in New York.