This is the type of holiday-shopping season that retailers dream about. The economy is hummingamid strong employment and high consumer confidence. Many workers have enjoyed wage gains, and fewer shoppers say they’re planning to stick to budgets compared with prior years.
It all adds up to a potentially record retail season.
Consumers said they plan to spend $1,048 on average including gifts, decorations and holiday food this season, according to a survey of nearly 7,800 adults by the National Retail Federation. That’s up from $1,007 in planned per-capita spending last year.
“It has the makings of a banner year,” said Scott Hessell, a retailing professor at the University of Arizona in Tucson.
This year, the traditional holiday shopping season is shorter than normal, with Thanksgiving – always held on the fourth Thursday of November – falling on its latest possible date. But so what? Retailers already rolled out pre-Black Friday deals for weeks, and promotions will continue well into January.
Here are some of this year’s themes for the coming weeks and beyond:
Physical stores reinvent themselves
Despite increasing online sales, most people still like to shop in person. Malls, other shopping centers and physical stores will continue to play a significant role this holiday season.
Roughly 90% of retail sales still are conducted in stores, said Hessell, who serves as director of the University of Arizona’s Terry J. Lundgren Center for Retailing. “People want to come in, feel and try on products and talk to someone,” he said.
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At the same time, the United States has an overcapacity of physical retail space compared to other nations, he said, which means many stores are downsizing, reconfiguring or emphasizing new uses. Some are closing.
To make stores more relevant, retailers are using them more as places to pick up and return online-ordered merchandise. For example, Kohl’s has partnered with Amazon to provide pickups and allow returns of items bought on Amazon. Whole Foods offers expedited free delivery for Amazon Prime customers. Walmart and other retailers now offer curbside pickup, and Walgreens and others are experimenting with drone deliveries.
“They’re all trying to figure out ways to get products to you faster,” Hessell said.
Among consumers queried by the National Retail Federation, 48% said they plan to buy merchandise online and pick it up at stores this holiday season. Almost three in four respondents plan to research or buy at least some items using a smart phone or tablet.
Sensory experiences expand
Aided by technology, many stores and shopping centers are offering more sizzle.
For example, in Arizona, Scottsdale Fashion Square and Chandler Fashion Center, in partnership with HGTV, now feature an immersive “Santa HQ” digital experience this holiday season. The presentation includes a synchronized holiday light show, photo shoots with Santa Claus, a Naughty-or-Nice barometer and a Magic Mirror display that allows visitors to try on elf outfits, virtually.
Shoppers who venture into certain stores – sometimes for the first time since last holiday season – will find a different feel to many of them, with retailers trying to turn visits into exciting, emotionally fulfilling “sensory experiences,” Hessell said.
They’re doing so through innovative store layouts, decor, technological displays and in other ways. More are using museum-like product displays, touchscreens that allow shoppers to learn more product details and adjustable lighting in fitting rooms.
A Nike store in New York City, which the company said will be a model for other outlets, allows shoppers to order inventory from the back room and pay for items using their smart phones without dealing with store associates. Customers even can customize shoes and wait about an hour while they’re being made.
“They’re making it more of an engaging experience,” Hessell said. “It’s not just having a bunch of shelves for you to come in and pick out your product.”
Gift cards reign supreme
If you’re looking to give presents that aren’t likely to be returned, look no further than gift cards.
These near-cash substitutes are the most common type of gift cited in the National Retail Federation report, with 59% of respondents planning to buy one or more this holiday season. That beat out clothing/accessories, the second most popular choice at 52%, followed by books/media (35%), electronics (29%), home decor (24%) and jewelry (23%).
Gift cards also are the most commonly requested item, cited by 59% in the National Retail Federation survey.
Gift cards are convenient to purchase and widely accepted, but they vary in some key respects. Some charge modest activation or other fees. Some can be registered online and, if lost or stolen, the dollar balance would be frozen until transferred to a new card. With other cards, or those not registered, any remaining money could be lost.
Bankrate.com suggests presenting the activation receipt when you give a card. That way, the recipient will find it easier to replace a gift card if it’s lost or stolen.
One major category of gift cards are those issued by specific retailers, restaurant chains or other companies. The other main category are cards issued by Visa, MasterCard and other payment networks. The latter type of cards can be used more widely. The Office of the Comptroller of the Currency provides more details about gift cards here.
Tariffs squeeze retailers, consumers
Consumers might not notice much, but prices for many products have risen due to tariffs slapped on imported products, especially those made in China.
The imposition of tariffs, or taxes, likely explains part of the forecasted increase in overall retail sales. In that sense, the holiday shopping numbers aren’t so rosy as they seem at first glance. The impact of tariffs is difficult to measure, as retailers don’t just pass the entire higher costs directly to consumers but absorb some of it.
“If some of the increase in retail sales is a result of the tariffs, it reflects losses to households who are getting fewer goods and services for the amount they are spending,” said Steve Horwitz, an economics professor at Ball State University in Indiana.
Horwitz cited various studies that estimate households pay anywhere from $1,000 to $2,000 or so yearly in tariff expenses, though calculating the amount is tricky and depends largely on the assumptions used, he added. Still, the studies agree that “households/consumers are paying some decent share of the total cost,” he said in an email to The Republic.
Many retailers have adjusted to tariffs for the past couple of years, so the price hikes haven’t come as a shock, said Hessell. For example, some have signed on with vendors in nations such as Vietnam to minimize the impact on Chinese-made products. Retailers started to buy some holiday inventory such as clothing 12 to 18 months ago, he said.
Relatively little merchandise for the current holiday season will be affected by the next scheduled wave of tariffs starting Dec. 15.
Holiday waste piles up
Many people wind up with a lot more trash over the holidays – Americans generate about 25% more waste between Thanksgiving and New Year’s Day compared to other times of the year.
According to Republic Services, the Scottsdale-based trash hauler, much of this trash can be recycled including standard wrapping paper, metal cans (unless they have an insulated coating), hard-plastic containers/jugs and cardboard boxes.
Cardboard is especially important, representing 42% of all recycled material processed by Republic Services so far this year. You can leave on tape and labels but should flatten boxes before putting them in recycling containers, said Jeremy Walters, a company spokesman.
Items that typically can’t be recycled include bubble wrap, cellophane, foam packaging, holiday ribbons/bows, batteries, food waste, clothing/shoes, holiday lights and electronics. Sticky gift tags are too small to recycle by themselves but can be recycled if affixed to envelopes, plain wrapping paper or paper bags
As for plastic bags, those thin enough that you can easily poke your finger through don’t belong in the recycling bin, as such bags can get tangled in sorting equipment. But all-plastic bubble mailers can be recycled by dropping them off with plastic grocery bags in supermarket bins, Walters said.
Despite recent media reports detailing a glut of recycled material, consumers willing to make the effort should continue the practice. “Recycling is still very important despite the challenges the industry has faced,” Walters said in a prepared statement.
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