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RSI Executive Search Firm Company Newsletter, December 2010

Issue: #31
Date: December 1, 2010


Holiday Spending PDF Version
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This Month in the RSI Newsletter
» Holiday Spending

Executive Search Firm Newsletter Executive Search Firm Newsletter

Holiday Spending

‘Tis the season to go shopping and spend a lot of money. Once upon a time this was the case; the holidays consisted of crowded malls, jam-packed parking lots, company bonuses, and endless amounts of gift giving. With the continuance of this lingering “Grinch-of-a-recession,” holiday spending this season has forecasted yet another somewhat grim prediction. Consumers are expected to spend slightly more than last year on gifts, while saving money by not traveling far and just staying home for the holidays. As Kelly Evans of The Wall Street Journal reported, “51% of those surveyed by Texas-based First Command Financial Services are not traveling at all for the holidays this year, and another 28% are staying within 100 miles of home.” This is a smart and convenient move for most people, especially with the high gas prices. With the combination of escalated gas prices and innovations in technology, the internet has become one of the fastest growing and popular shopping venues, especially during the holidays.

The holidays in a technology-driven era

Last year, online holiday spending was up 4%, hitting nearly $30 billion. Retailers realize that the internet is becoming more instrumental than ever in people’s lives, which is why they advertise numerous deals and sales on products and shipping, especially during the holiday season through their websites. With this increase in technology over the years, also brings the popularity of using smart phones to shop. This new trend is even more prevalent among young adults ranging from ages 18-24. Retailers are enhancing their mobile applications and websites in order to cater towards this generation and the holiday season.


 

 


Continued...

The difference with this holiday shopping season in particular, is that retailers are noticing a more consistent sale of newly released products. In addition, the most successful companies during the holidays now and in the last year or two are discount retailers. The condition of the economy easily explains why “Higher priced locations like electronics stores and specialty apparel retailers were less popular this year than last,” Kelly Evans of The Wall Street Journal states. People are still shying away from spending and committing more to saving.

How to compensate during the holidays

Because the recession has shifted consumers’ buying habits, especially during the holiday season, there are many ways that shoppers and holiday-goers can cut back. According to the National Retail Federation’s 2010 Holiday Consumer Intentions and Actions Survey, 61.7 percent of shoppers say the economy will impact their spending, down from last year's 65.3 percent. Many consumers say they will compensate by spending less (81.5 percent), comparison shopping online (30.9 percent) or with newspapers and circulars (28.1 percent), shopping for sales (54.1 percent) or using more coupons (40.6 percent). Comparing products online enables people to stay within the comfort of their home while also spending less money on gas driving store to store looking for that “perfect gift.” A fair portion of the population will not be traveling anywhere for the holidays. Some people are even skipping out on the season completely. Luckily, only a “sliver-1%-say they are even cancelling Thanksgiving dinner altogether,” stated Evans.

 

 


Continued...

As always, consumers tend to shop more frequently when there are sales and clearances involved. Discounts are at the forefront of many retailers’ marketing strategies throughout the entire year and especially during the holiday season. Black Friday is a prime example of a day dedicated to sales and discounts, which consumers need to take advantage of. Facing the crowds and lines may not be ideal, but in the end, will most likely keep shoppers’ wallets full.

Cutting back in consumer spending is an all too familiar trend these past couple of years. This movement towards spending more than last year during the holiday season is an optimistic sign for an economic turnaround. The holidays are an extremely critical season for retailers because the time between Thanksgiving and New Year’s accounts for roughly a quarter of their annual revenue. With this said, retailers are excited to see the outcome of this year’s shopping season. Although the predictions are still gloom, the hopes are slightly higher than they were last holiday season for overall spending. This brings, at least, a slight sense of confidence to the consumers and retailers in yet another ho-hum holiday shopping season.

 

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