A slow economy that’s marked by stubbornly high unemployment probably won’t crimp the holiday shopping season that kicks off on Black Friday, the day after Thanksgiving, some experts say.
It’s more than just a matter of economics, according to faculty at Emory University’s Goizueta School of Business. Instead, a diverse set of factors ranging from the Web to psychology will likely influence shoppers’ spending patterns.
“I expect merchants will be pleased by Black Friday sales volumes,” says Jagdish N. Sheth, a chaired marketing professor at Goizueta. “Child-oriented merchandise and electronics — including flat screen TVs, smart phones, tablets and applications — for all ages will likely dominate the activity. Online subscriptions and e-books should do well; and even though the volume of clothing sales is likely to be weaker than last year, higher prices will probably mean that the dollar amount of overall clothing sales will at least stay constant.”
Many brick and mortar stores are opening earlier than ever, with some launching sales on Thanksgiving Day itself, but Sheth believes merchants are also trying to drive online sales, “since they’re easier to manage, and all payments are electronic.”
The relatively high unemployment rate won’t do much to dampen shoppers’ enthusiasm, he adds, noting that it’s a matter of psychology.
“People get used to it, just as they’ve gotten used to high gas prices,” Sheth says.
Lending and credit policies will also make a difference.
“Banks are slowly easing credit limits and are issuing more credit cards,” he observes. There’s a danger that people will overextend themselves with plastic purchases in the long term, but right now it looks like Black Friday should be good for merchants.”
Some studies indicate the “bulk of the spending this year will be done by the affluent and they will spend on even more this year than they did last year,” according to Reshma Shah, an assistant professor in the practice of marketing at Goizueta.
“Nielsen did a survey that indicated that the most affluent part of the population ($100,000 and up) will end up doing more shopping online and in club stores, where either uniqueness or value are the main drivers of choice,” she said. “But people earning $50,000 a year and less will end up spending less than last year and will focus on less expensive gifts and to fewer people. The less affluent will shop at dollar stores and super centers to take advantage of the low prices.”
Shah sees apparel as being the No. 1 item on most holiday shopping lists, followed by electronics.
“Newer technologies are emerging and the prices of these technologies have come down to be within reach of many Americans particularly when they buy from club stores and discount stores,” she explains. “Within this category, video games and accessories are expected to be top sellers, followed by MP3 players and iPods, e-book readers like the Kindle and Nook, video-game system like the Xbox and Wii, headphones, and laptop, notebook, and tablet (iPad) computers.”
But the holiday spending spree may boomerang later, she cautions.
“There will always be those who jump to buy and use credit cards during the holiday season without thinking through the consequences,” Shah says. “But they are also more likely to curtail their spending once the holidays are over.”
– Marty Daks