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Consumers will increasingly spread their spending out over the course of the year

By Kirsten Green, Partner
@kirstenagreen

Retailers are anticipating lackluster sales this upcoming holiday shopping season with 29% of consumers considering shopping on a tighter budget. Over the past decade, holiday sales have inched higher each year; in 2011, consumers spent a total of $553 million, two-thirds of the $886 million they spent in 2021. 2022’s upcoming holiday season underscores a marked change in consumer sentiment: analysts predict that holiday shopping sales will grow by just 1% to 3%--the lowest growth rate in a decade.

Inflation and supply-chain shortages certainly play a role in this shift, but the anticipated slow down also signals the unfolding of a new reality: the holidays are becoming less important, especially when it comes to retail sales.

Online shopping events throughout the calendar year have already eclipsed holiday sale events like Black Friday and Cyber Monday. With $11.2 billion in sales, Amazon’s 2021 Prime Day outpaced Black Friday sales the same year by more than $2 billion. The world’s biggest shopping event, Alibaba’s Singles’ Day, is a synthetic holiday with zero traditional or religious significance; it brought in nearly $80 billion in sales over the course of 11 days in 2020 alone. Moreover, a significant

Holiday shopping has grown less important for a number of reasons. Increasingly, consumers spread their shopping out over the course of the year. A recent Forerunning survey found that 43% of consumers shop online weekly, with 49% of shoppers saying that they rarely go out of their way to shop seasonal sales events. Additionally, Forerunner found that the majority of shoppers (51%) tend to buy products when they need or want them and struggle to name items they would like as gifts.

With nine out of ten Americans celebrating, Christmas is still an important holiday for the vast majority of people. But the event has changed significantly in recent years.

The ritual of gift-giving is increasingly seen as stressful and inconvenient. Three out of five Americans consider buying gifts during the holidays to be the most stressful financial event of the year, followed by paying their taxes. Buying gifts is so stressful that 62% of people said they would ditch exchanging gifts altogether if given the option.

Additionally, experiences are increasingly valued higher than gift-giving during the holidays, something which is especially true in the wake of a pandemic that isolated people from their loved ones for multiple years. A Forerunner survey found that people consistently rate holiday experiences like spending time with loved ones and eating a celebratory holiday meal over giving and receiving gifts. Travel has also become an increasingly important part of the holidays: 62% of people would prefer to receive the gift of a trip over a physical present. Additionally, people are booking Christmas holiday vacations earlier than ever before: pre-pandemic, a record number of Americans–around 115 million–traveled during the winter holidays.

There’s also the reality that many Americans are becoming aware of the problems associated with overconsumption–an issue that came into stark focus during supply-chain interruptions caused by the pandemic. More people are realizing that saving the majority of their shopping for one big holiday event not only places an enormous strain on the supply-chain but is bad for the environment as well. An anti-consumerism mindset during the holidays is becoming more popular, with more families abiding by “no-gift Christmas” pacts or participating in “Buy Nothing Christmas” groups.

For retailers, a decline in holiday shopping may at first sound like bad news; but the reality is that, as more consumers spread their spending out over the course of the year, retailers stand to experience less seasonal volatility, inventory related challenges and unpredictable staffing demands.

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This Week’s Top 10 Consumer Insights

By Forerunner
@ForerunnerVC

Small businesses are building their own supply chains and leaning into “made in America” pride. They face challenges though, from labor costs and a patchy system to lack of capital innovation, automation, and knowledge.
Warehouses are overstocked with excess merchandise, $732 billion worth—that’s an increase over last year of 21%. With inflation mounting, a recession looming, and consumers thinking twice about spending, it’s bad timing for retail, and experts predict there will be many sales this holiday season.
Even though 65% shoppers plan on spending about the same amount for holiday gifts as last year, they’ll be tightening their belts in other areas to compensate, including home entertainment (28%), clothing and accessories (28%), jewelry and watches (27%) and home decor (27%).
According to a recent survey, buy now, pay later is how nearly half of Gen Zers and millennials plan to get their holiday shopping done. The research also showed that about the same percentage of Gen Z and millennial consumers intend to shop for the holidays via social media.
The beta version of the Walmart Creator Portal was released with the goal to “democratize the tools and resources” needed to become a creator. The brand will provide creators with access to thousands of products and allow them to make a commission (with no limit) on the company’s product links shared on any social media platform.
A new study has found that “checkout charity” increases customers’ anxiety. When a cashier or kiosk asks for a donation, about 40% of the words that customers used to describe the interactions were negative feelings, like “pressured” or “annoyed.”
Shein has launched a resale program called Shein Exchange in hopes of giving the fast-fashion retailer sustainability credibility after repeated criticism of waste.
Some companies are keeping their climate pledges secret out of fear of being accused of greenwashing. A new survey found that although a majority of companies have science-based targets, 23% “don’t plan to publicize” them.
Over half of shoppers think that the fashion industry needs to become more sustainable with 54% saying they “don’t completely trust” the eco claims that brands make, says a new survey. Also noteworthy: 42% say they’ve tossed clothes they would’ve liked to have kept if they could have gotten them repaired, with 60% saying that stores should offer repair services.
In light of recent rounds of corporate layoffs, Gen Z and millennials are sounding off about being let go on TikTok. Some have not held back about exposing their employers’ not very compassionate job cuts and losing their “toxic mindset.”

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