Big spending expected this holiday season as new trends emerge
This week’s frigid temps and the avalanche of emails you may be receiving about pre-Black Friday deals are a sure indication that – even with Thanksgiving still two weeks away – the holiday shopping season is here.
So, how does this year’s season shape up for retailers and consumers?
Each year, we turn to contributor Eileen Dallabrida for answers. She says expectations for 2019 are high, and notes some new trends are taking hold.
Americans are expected to spend more than ever on the holidays, with one forecast topping $1 trillion dollars for the first time, with the biggest share of dollars going to experiences and celebrations.
While consumer confidence remains high as wages rise, merchants will be challenged by a shortened shopping season created by a late Thanksgiving, with Black Friday falling only 26 days before Christmas.
Overall, shoppers are expected to get cash registering jingling to the tune of $730.7 billion, a 4.2 percent increase over last year, with the average shopper spending $1,043.83, says the National Retail Federation (NRF), a Washington D.C.-based trade group. A forecast by the research firm eMarketer is even more cheerful, predicting sales of $1.008 trillion.
Online shopping also will reach a new high, with consumers clicking $143.7 billion in sales in November and December, according to Adobe Analytics’ calculations. That’s a 14-percent increase over last year.
‘Less clothes, less stuff’
For the first time, spending on experiences and celebrations will outpace traditional gifts, says a Deloitte survey. That includes entertaining at home, traveling and dining out. In all, consumers will devote 40 percent to experiences, compared to 34 percent on gifts.
“People are into decluttering, minimizing,” says Julia Bayuk, assistant professor of marketing at the University of Delaware. “They are buying less clothes, less stuff, and spending money on a great vacation.”
Bayuk bought snowboarding lessons for her son. GroupOn is marketing such experiences as cooking classes as “toys for the soul.”
Nancy Bell of Hockessin started shopping in early fall, during a tour of National Parks. She picked up a telescope and a guide to the constellations for her granddaughter.
“It will be a wonderful experience for her, learning about the stars and planets,” she says.
Like a growing number of shoppers, Bell also plans to patronize as many local stores as possible, heading to Wild Birds to buy gifts for her son, a nature lover.
Local and unique
Last year, the Poplar Hall Christmas Market in Newark proved so popular that traffic backed up for miles as shoppers came to buy handmade items by local artisans. This year, Poplar Hall is expanding to Pell Gardens in Chesapeake City, with more than 35 artisans, from woodworkers to ceramicists, at the Dec. 7 event.
“It is a requirement that each artisan hand-make their products and be present to talk with each customer on how it was designed and created,” says founder Greg Shelton.
In Wilmington, the Delaware Center for Horticulture is offering its first Holiday Bazaar on Dec. 6-7, where shoppers can buy one-of-a-kind, locally sourced wreaths, garlands, centerpieces, and gifts from artists and craft vendors.
Generations of shoppers
Where and how consumers spend depends largely on demographics. Affluent shoppers, defined as households earning $100,000 or more, will generate 65 percent of total holiday dollars, according to a Deloitte poll. Big spenders are defined as consumers who spend more than $2,100 on gifts. Those shoppers also are more likely to choose spa treatments over sweaters, with 71 percent of their dollars going to travel and other experiences.
Generation X shoppers, ages 39 to 54 and in their peak earning years, will spend more than any other generation, says the NPD Group. They also have more people to buy for, from parents to grandchildren. At the top of their lists: clothing and accessories (68 percent) and entertainment (44 percent).
Members of Generation Z, ages 18-22, don’t recall life before the internet. But most will do their holiday shopping in brick-and-mortar stores, according to the NPD report. So how come? Analysts conclude it’s because many Z-ers don’t yet have credit cards.
Millennials, ages 23 to 38, will do most of their shopping online, NPD says. Nearly half—46 percent—will buy electronics. They also are most likely to shop at dollar stores.
More than half of Baby Boomers, ages 55 to 73, are heading to department stores, the report says. Boomers also will pour it on for the holiday with gifts of wine and liquor.
Members of the Silent Generation, ages 74 to 91, are the latest shoppers, making most of their purchases close to Dec. 25. About half will shop online. Some, like 86-year-old Annabelle Kressman of Hockessin, will simply write checks.
“Shopping is like cooking,” she says. “I’m over it.”
Many unhappy returns
In another shift in consumer behavior, shoppers are returning gifts even before the holiday because they found merchandise they like better or at a cheaper price. UPS predicts shoppers will send back about one million packages each day during the month of December, spiking to 1.6 million returns daily during the week before Christmas.
Returns are expected to reach their zenith on Jan. 2, with 1.9 million packages sent back, a whopping 26-percent leap from last year.
"As retailers start preparing for the busy holiday season, they should certainly be factoring returns into their business plans," UPS spokesman Kevin Warren said in a statement. "Gone are the days where returns were isolated to January — today's empowered consumers will be sending packages back to retailers all season long."
So what’s motivating shoppers? Price is the No. 1 factor, says the 2019 Consumer Shopping Holiday Report from Rakuten Marketing, with 58 percent of consumers looking for a deal. Nearly one in four—23 percent—want free shipping. And 15 percent are keen on coupons.
Here are other developments on the retail front:
- Despite merchants’ attempts to lure consumers to stores earlier in the season, Black Friday remains the biggest shopping day of the year. After that, the highest-volume days will be Dec. 21, the Saturday before Christmas, followed by Dec. 14, Dec. 20, Dec. 7 and Dec. 13, says a Mastercard poll.
- Attention Kmart shoppers. The big box discounter is celebrating its final holiday season in Delaware, with the store on Route 1 in Rehoboth Beach slated to close in February. A going-out-of-business sale kicks off on Dec. 2.
- Nearly three out of four shoppers will phone it in this year, as 70 percent of consumers use smartphones to make at least one purchase, says a Deloitte survey.
- Convenience is king. Target’s drive-up service allows customers to order on the Target app and have items brought to their car an hour later. Expect employees to bring items to the car in less than two minutes after arrival.
- Trade tariffs on imports aren’t significantly inflating prices, chiefly because merchants knew they were coming and stocked up.
One thing is not new, and that is that for many consumers, shopping on Thanksgiving is becoming a holiday tradition, like pumpkin pie.
This year, 58 percent of shoppers plan to hit the stores and goggle up bargains on Turkey Day, up from 45 percent last year, according to marketing intelligence firm MiQ's 2019 Holiday Shopping report.
In response to consumer demand, Bed Bath and Beyond and Game Stop are joining such retail giants as Target, Walmart, Best Buy, J.C. Penney, Macy's and Kohl's in opening on Thanksgiving. Costco, Nordstrom, Burlington Coat Factory, Apple, Marshall’s, T.J. Maxx, Office Depot and Staples will maintain their tradition of staying closed.
Shoppers will find a cornucopia of deals on both the holiday and Black Friday. Here are a few nibbles:
- Bargain hunting at Best Buy begins in stores at 5 p.m. on Turkey Day. Can’t wait? Deals will be available online all day on Thanksgiving. Picture a Canon - EOS Rebel T7i DSLR Two Lens Kit with 18-55mm and 55-250mm Lenses, reduced from $1,199.99 to $699.99. Add to your family of voice-activated assistants with an Amazon - Echo Show 5 Smart Display with Alexa, discounted to $49.99 from $89.99.
- Target will be open at 5 p.m. on the holiday, close at 1 a.m. Friday and then reopen at 7 a.m. on Black Friday. Doorbusters include an Instant Pot six-quart Duo Nova multi-use pressure cooker, marked down to $64.95, a $35 savings.
- Walmart is luring Black Friday shoppers with super bargains. The deals include: an Apple 10.5-inch iPad Pro WiFi, 512GB (2018 model) for $699, a $300 savings; and a Sony PlayStation 4 Pro Bundle for $269.99, marked down $130.
- Kohl’s is sweetening its deals with Kohl’s Cash, which customers can apply to other purchases. A Ring Video Doorbell 2 is priced at $139, a savings of $60, plus $30 in Kohl’s Cash. Fitbit Charge 3 is $99.99, reduced $50, and also comes with $30 in Kohl’s Cash.
- Costco is leveraging its relationships with premium suppliers by giving Black Friday discounts on brands that don’t typically offer markdowns. For example, 13.3-inch Apple MacBook Pro with Touch Bar, Intel i7 model will be $1,499.99, a savings of $250. A 65-inch Sony 4K UHD LED TV is priced at $699.99.
- On Black Friday, Nordstrom shoppers can kick up their heels for Sam Edelman suede booties, reduced from $129.95 to $77.90. A Rebecca Minkoff mini MAC bag is $99, marked down from $198.
- Macy’s is hoping to clean up with a doorbuster deal on a Dyson Big Ball Multi-Floor Canister Vacuum priced at $229.99, a $270 discount. But be sure to shop early. The price goes up to $399 after 1 p.m. Friday. The department store is dangling diamond earrings to entice shoppers to buy more. Buy at least $50 in merchandise and get the earrings, originally priced at $200, for $29.99.