As the festive season approaches, businesses are preparing for a surge in holiday spending. However, recent news events in the US and other global crises may impact consumer spending habits.
The threat of a US Government shutdown still looms and American education debt repayments resumed in October. On the international stage, the Israel-Hamas war is dominating the media cycle, and food and gas prices are escalating globally.
Moreover, financial burdens and other socioeconomic pressures could pinch shoppers’ pockets, affecting their spending decisions and festive season plans.
Economic growth predicted
Despite jarring headlines, the e-commerce realm thrives, with additional growth projected over the holidays. In February, Forbes predicted a growth of 10.4% in e-commerce sales, adding that the global e-commerce market could achieve a valuation of $6.3 trillion by the end of 2023.
According to Deloitte’s annual holiday retail forecast, holiday sales are likely to increase between 3.5% and 4.6% this year.
Deloitte’s US economic forecaster, Daniel Bachman, says they “expect healthy employment and income growth to keep the volume of sales growing for the 2023 holiday season.” He says the total value of retail sales “will grow more slowly than last year.”
“Our forecast also reflects a decreasing pool of pandemic-era savings, both of which will weigh on retail sales and are reflected in our lower projected growth for the season. Retail sales are expected to increase even as higher prices continue to create a battle for consumer spending,” Bachman adds.
Bad news ‘a near constant’
Meanwhile, Brad Scott, director of finance at Halstead Bead Inc. says chaos in the news “seems to be near constant.” He says consumers are “pretty resilient against it” by now.
That said, consumers still get nervous when “factors such as the price of housing, groceries, fuel, or health care start to impact a household’s budget.” Scott says Halstead Bead will focus on maintaining a consistent marketing presence to ensure online visibility.
“More importantly, we must continue to serve our customers with the level of service they have come to expect from Halstead. It’s easier to keep a current customer happy than to find a new one,” he concludes.
Agile marketing strategies
CEO Lynette Kelley says the products stocked by Calamity Worldwide, an online gift retailer, are unique and seen as a “treat or a gift.” She says the current troubled times would motivate people to spend money “on things that make them feel special.”
It doesn’t mean smooth sailing for her company, though. She says they are adjusting their marketing strategy by targeting lower-priced items to demographics impacted by recent events in the US. This includes millennials who are paying off student loans.
As retailers gear up for the holiday season, the blend of uncertain headlines and economic pressures paints a complex picture. Retailers should focus on agile marketing strategies in line with consumer sentiment.
About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.