The holiday shopping season has started. Here is what to expect.
Almost one in five consumers plan to shop in physical stores. Many say this often generates gift ideas. These shoppers spend almost 10 per cent more than the other shoppers at this time of year.
That is good news for retailers who often depend on increased sales during the holiday rush. This information is from PWC.
There is more optimism this year. Inflation and interest rates are lower than last year. Two out of three people feel the economy is stronger and continuing to strengthen.
Younger shoppers are spending more. Travel expenses will jump by almost 60 per cent and part of that can be attributed to recovering from the slowdown in travel during COVID-19.
Shoppers are becoming more strategic. They anticipate prices will be higher although they will do what they can to manage how they shop and how they spend. This will include consumers switching brands if that means getting more for less. Some will purchase resale items.
Holiday shopping has the same ingredients as shopping during the year. Retailers anticipate demand and plan accordingly. Shoppers attempt to maximize what they can buy while attempting to minimize their cost.
Behind-the-scenes retailers are looking for efficiency. This year the PWC survey indicated retailers are using artificial intelligence to best coordinate supply chain issues. For example, items that will be sold in the same aisle of the store are loaded on the same pallet.
Retailers want to maximize profit. This is done by selling more, which adds to total revenue. By being efficient and cutting costs its expenses are reduced. Firms that do this the best will be the most profitable.
That is the business side of holiday shopping. As for you, we hope you enjoy this special time of year.
Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com
