Did the last holiday weekend leave a gaping hole in your wallet? Nearly 200 million people hit brick-and-mortar stores and shopping websites between Thanksgiving and Cyber Monday. The National Retail Federation expects consumers to spend more this holiday season compared to last year, upwards of $900 per person on gifts, food, and decorations. Total consumer holiday spending could approach $1 trillion. Aren’t shoppers worried about inflation and having to spend less?
Consumer confidence has risen in recent weeks, which can be common after elections, says Kristin Diehl, professor of marketing at USC’s Marshall School of Business.
“The data we had before Thanksgiving, like the consumer confidence index, already suggested that people were positive, although it really depended on their political affiliation. So Republicans’ expectations really sharply turned positive in November. Versus those who identified as Democrats, their expectations were not so positive. But on average, that was positive.”
She says when people feel more optimistic about the economy, they tend to make more purchases, hoping inflation will decrease; and those who aren’t so full of hope may be doing retail therapy.
Shoppers are also using older forms of payment again, such as layaway and pay-over-time plans, Diehl says.
A big driver of sales: retailers launching marketing efforts earlier and more frequently, which can feed into consumer fears of missing out. “It used to be Cyber Monday, but all these things came so much earlier, and you really felt like you are missing out on these deals if you're not going online or going to the stores now.”
And it’s not that retailers are necessarily offering more deals — they’re just putting out more messages about those deals, she clarifies.