It may just be the start of fall, but retailers and consumers alike are ramping up for this year's holiday shopping season. While the economy has made some gains from last year’s holiday season, the stubbornly-high unemployment rate and stalled recovery has consumers wary to spend.
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Dorothy Barrick, Greenpath Debt Solutions financial counselor, said that although economic recovery is underway, consumers are still operating under a more financially-conservative mindset influencing the retail and shopping trends that will emerge this year.
"I think people feel it's safer to discuss with family and friends that money is tight," Barrick says. "They realize that America is having problems as a whole, and don't take it as a personal lack of something they are doing." She expects cash-strapped consumers to limit their participation in gift exchanges and holiday parties and
opt for handmade gifts like home-cooked food.
Thanks to increased popularity of daily deal and flash sale sites, retailers are going to have adjust to consumers’ expectations of discounts. Americans are no longer willing to pay full price for items, according to Fiona Dias, chief strategy office for ShopRunner, a shopping site that offers free shipping from different stores. Many shoppers now refuse to settle on prices they feel are too high.
"In the last two and a half years, we have gone from thinking that it's OK to pay full price, to having that totally flipped," Dias says. "Consumers have shifted to 'I always want a deal, and I'm not very smart if I am paying full price.' They are conditioned to not wanting to pay full price unless they really have to."
With this is mind, here are the trends Barrick and Dias are predicting for this holiday shopping season:
No. 1: Online sales dominate. Dias expects to see a continuing shift of consumers flocking to their favorite stores’ websites, rather than hitting up the brick-and-mortar stores. According to Dias, consumers feel they can find better bargains available online, and shoppers can compare prices more easily.
"The pricing is better and coupons and promotions are easier to find online. If you are frugal, or have to stay within a budget, you can do that easier online."
No. 2: Layaway. A few years ago, layaway was going out of style, but since the 2008 recession, this service is making a comeback. Barrick says consumers are welcoming the idea of paying off their items gradually rather than piling on additional credit card debt.
"I can remember when layaway disappeared and now it's back and catching on," she said. "Some stores will even honor their sale prices on layaway items."
No. 3: Tablet mania. As this market continues to grow, tablets will be a more popular item on people’s wish lists this year, especially with Amazon’s recently-released Kindle Fire.
Aside from that, expect shopping to be done on these devices, rather than on computers and smartphones. Dias predicts shoppers will be purchasing larger items on the tablets—rather than typical tablet purchases such as books and music.
No. 4: Less emphasis on luxury. After surviving, and still reeling from the recession, Americans are not focusing as much on name brands, according to Barrick.
"The social stigma of name brands just is not what it used to be," she says. "I don't see that turning around. So many people are trying to pay for necessities that they are not spending a lot of money for luxury items."
No. 5: Free shipping. Dias says consumers can expect more free shipping deals as stores look to increase their competitive edge and will only be more frequent once the holidays get closer.
"That is one of the last remaining barriers to buying online, not wanting to pay for shipping. It is going away, and there will be more and more aggressive shipping promotions."