NRF Predicts Healthy Holiday Spending
NRF Predicts Healthy Holiday Sales as Consumers Navigate Economic Headwinds
Hayward Wis - The National Retail Federation on November 3rd released their predictions for the 2022 holiday shopping season. The predictions include a 6% to 8% increase in consumer spending, totally up to $960.4 billion.
Why are retailers offering deals in Nov?
Consumer demand is trending towards consumers having an inflation-cautious mindset. According to an NRF survey, 44% of consumers believe inflation will only continue to rise, therefore purchasing holiday gift items sooner than later is an ideal practice to stave off increase prices and holiday price hikes. Another 31% believe that the deal won't get any better than do to during the Black Friday 5-day shopping weekend.
Is Black Friday Still Important?
Black Friday and Cyber Monday are part of the 5-day holiday shopping event that takes place each year which starts on Thanksgiving Thursday, and continues into Cyber Monday shopping.
These 5-days represent the largest sale volumes for retailers nationwide, even larger sales volumes than Back-to-College, and Back-to-School, which represent a longer period of sales with higher sales volumes, but the 5-day concentrated period produces the highest sales volumes in the world.
Retailer have shifted their strategy to move the bulk of their inventory over these 5 days with bulk ordering, group purchasing and warehousing so as to enjoy the highest margins possible even with Black Friday, Small Business Saturday, and Cyber Monday deals.
Retailers are also adopting the new age technology of e-commerce drop shipping as a means to increase their revenue and increase inventory volume whereas the storefronts an in-store storage cannot hold enough inventory to meet the demands.
The latest National Retail Foundation survey indicates that 45% of consumers are likely to browse inventory and deals online, then come in-store to shop and purchase so as to avoid shipping delays, porch pirates, or any other possible issues that can happen between point of purchase and shipping issues.
How will inflation impact Holiday spending?
In a September 2022 survey conducted by the National Retail Federation, 62% of holiday shoppers agree that it is very important to do their holiday shopping during the Black Friday / Cyber Monday period specifically as a method to offset the increases in costs, and avoid any additional price hikes or inflationary effects.
Unfortunately, 43% of consumers have reported not earning enough to cover the costs of gifts this year. Consumers are looking to cover their costs through unconventional means, include:
Holiday Hiring Plans
Retailers have reported engaging in a Holiday Hiring Plan to meet the demands for increases in shopping during Black Friday / Cyber Monday. However, the difficulty in finding seasonal workers, part time workers and full-time worker hasn't subsided, some retailers are looking at going the e-Commerce Drop Shipping route so as to allow fulfillment centers do the picking, packing, and shipping.
Those who are fortunate enough to hire for the holidays, will definitely have plenty of work for them to do with the 6% to 8% increase in holiday spending.
National Retail Federation: www.nrf.com
Prosper Insights and Analytics: www.ProsperInsights.com