Holiday spending should be heavily impacted by months of early discounting
With increasing inflation, excess inventory and many discounting offers by big retailers, experts believe that this year’s online holiday spending will be the slowest the U.S. have seen in years.
Special sales throughout the year will directly affect retailers around the holiday season.
After a long period of sales from retailers struggling to get rid of excess inventory in 2022, getting shoppers to splurge on their holiday spending won’t be such an easy task this year. For months now, retailers had been scrambling to move their products after a post-pandemic miscalculation.
Not only that, but inflation has been affecting consumers, which in turn focus companies to cut down prices even further. In order to compete for holiday spending, many retailers are putting up sales much earlier than usual.
Those are some of the factors that will likely dampen demand and big holiday spending. It applies even to online shopping, where consumers have been doing most of their purchases in the last few years.
According to Patrick Brown, vice president of growth marketing at Adobe, the direction of the holiday season will be different in 2022. Many retailers are offering early discounting starting in October. That pulls up spending that would’ve happened around late November with Black Friday and Cyber Week.
This year, Black Friday online sales are expected to increase about 1% from 2021. According to Adobe, Cyber Monday revenue looks a little better, with a 5.1% growth from last year. But the overall holiday spending is forecast to increase just 2.5% this year. The smallest growth since 2015.
Less holiday spending on Black Friday
In 2021, holiday spending also got off to an early start. However, the reason behind it was because consumers were trying to secure their gifts amongst a supply chain issue that led to shortages around the country.
Now, companies are the ones after consumers with early deals to get rid of excess inventory or to compete for business. These ongoing sales and discounting means that holiday spending might actually spread out during the holiday season.
Amazon is holding a second Prime Day this year next Tuesday, which is the first time the retail giant has held its most famous discount day twice in the same year. Other big retailers like Walmart and Target are also getting an early start.
However, such an abundance of early deals could mean that consumers will already be stocked up on gifts and other products by the time the holiday season starts. Holiday spending usually starts right after Thanksgiving, and the projections are already looking down.
According to PricewaterhouseCooopers, about 20% of consumers are expected to shop on Black Friday. That’s a 16% decrease from 2020.
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What is Amazon Prime Day and how does it work?
If you plan on doing your holiday spending with Amazon on its second Prime Day run, we’ll help you out. Follow the link below to learn everything about how it works and how you can participate!
About the author / Aline Barbosa
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