Santa’s bag of gifts will likely be a bit lighter this year as he and the elves navigate holiday shopping amongst a sea of inflation.
With the cost of goods and services up 7.7% from last year, 50% of consumers say they will buy less this year, with average spending intentions dropping 10%. Despite Black Friday seeing a record high in sales, people were getting less for their money and retailers saw a decline in purchases in the months leading up to the holiday.
If you keep up with the consumer price index it should come as no surprise that due to the impact of inflation, 48% of shoppers are planning to use credit cards to pay for holiday purchases, and 37% plan to use buy now-pay later services. 27% of shoppers are expected to go into debt due to this holiday season.
Online shopping started to drastically increase in 2020, and the trend has continued ever since, with 2022 seeing a 33% increase compared to 2020. Black Friday alone made record breaking online sales, hitting a total revenue of $9.12 billion.
So, what does this mean for the remainder of the holiday shopping season? Well, there are still some great holiday sales lingering about. Market research shows that consumers are buying more than just gifts however, with increased spending being more concentrated on essential items than in years past. Due to this, shoppers plan to spend nearly half of their holiday budgets on gift cards.
Overall, consumers are spending more to buy less, with the increased inflation rate being the unfortunate underpinning of both shopping attitudes and gift choices. Sales and discounts will continue to drive the shopping season and both large and small businesses should look to conduct market research to get more insight into the unmet needs of their current customers and potential customers during inflation.
Exploratory research via qualitative focus groups, asynchronous online communities, quantitative research or other secondary market research methodologies will provide a competitive advantage in making a more festive season for both businesses and consumers.
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By Laura Hunnicutt | Community Junior Lead