Holiday spending has the potential to shatter previous records, according to the National Retail Federation.
The organization predicts that holiday sales during Nov. 1 through Dec. 31 will grow between 8.5 percent and 10.5 percent over 2020 to between $843.4 billion and $859 billion.
Those figures compare with a previous high of 8.2 percent in 2020 to $777.3 billion and an average increase of 4.4 percent over the past five years.
“There is considerable momentum heading into the holiday shopping season,” NRF President and CEO Matthew Shay recently stated “Consumers are in a very favorable position going into the last few months of the year as income is rising and household balance sheets have never been stronger. “
NRF expects that online and other non-store sales, which are included in the total, will increase between 11 percent and 15 percent to a total of between $218.3 billion and $226.2 billion. In comparison, that number is up from $196.7 billion in 2020.
But COVID-19 concerns still linger and the pandemic is still impacting supply chain issues globally.
More than respondent say they consider how products are delivered when they make a purchase., according to an Oracle survey conducted this fall. Another 92 percent say there will be more disruption in the future and 66 percent believe these issues are here to stay.
Nine out of 10 consumers surveyed by Oracle report they will change the way they buy things, whether it means stocking up, purchasing things earlier to allow for delays or buying in bulk.
“Pandemic-related supply chain disruptions have caused shortages of merchandise and most of this year’s inflationary pressure,” NRF Chief Economist Jack Kleinhenz recently said. “With the prospect of consumers seeking to shop early, inventories may be pulled down sooner and shortages may develop in the later weeks of the shopping season. However, if retailers can keep merchandise on the shelves and merchandise arrives before Christmas, it could be a stellar holiday sales season.”
Last year consumers turned to online shopping to meet their holiday needs during the pandemic. Online shopping will still play a big part in sales, but the NRF projects more households will shift back to in-store shopping.
“The outlook for the holiday season looks very bright,” according to NRF Chief Economist Jack Kleinhenz.
While it appears new COVID-19 infections and hospitalizations are down, a variant surge could negatively affect holiday sales and who people will shop.
Shopping small and local
In the the midst of the recession in 2010 American Express launched Small Business Saturday® on the Saturday after Thanksgiving to encourage people to Shop Small and bring more holiday shopping to small businesses.
Eleven years later, that need to support locally-owned and operated small companies is maybe even more important as communities look for recovery from the losses — both human and economic — suffered from the COVID-19 pandemic.
In an effort to support their local communities, organizations across the country sign up to serve as Neighborhood Champions.
These supporters bring their community together with events and activities on Small Business Saturday and throughout the year.
“We’re committed to helping small businesses stay in business. In 2020 alone, American Express spent approximately $200 million on initiatives to support small businesses around the globe. And when you Shop Small®, the dollars you spend at a local business in your community can add up, too,” American Express states on its Shop Small website.
Small Business Saturday continues to be an annual holiday shopping tradition — just one part of the larger Shop Small Movement that supports small businesses every day and everywhere.
Many downtown shopping districts tie in Christmas tree lighting ceremonies, house walks, Santa visits and other special events throughout the season to attract shoppers to their small businesses, both retailers and restaurants.
The Illinois Office of Tourism promotes small businesses and craft and specialty shops through its Illinois Made Holiday Gift Guide found on the enjoyillinois.com website. The list features businesses that sell handcrafted, popped, cooked, grown, brewed and sewn gifts.
Be aware of scams
Holiday shopping season brings joy and excitement but it also is a time for scammers to ramp up their activity.
The Federal Trade Commission offers the following tips to avoid scams during this time of year:
- Research sellers before you buy. Search online for the name of the seller and product, plus words like “complaint” and “scam.” And read reviews about the seller and their products, too.
- Feed your inner skeptic. This year’s “it” game? For a great price in mid-December? From a seller you’ve never heard of? See bullet #1.
- Compare products. Even with the chip shortage, shop around to make sure you’re getting the best deal. Comparison shop online, looking at prices, delivery dates, and even discounts or coupon codes.
- Pay by credit card. Paying by credit card gives you more rights to dispute the charge if something goes wrong. And if someone tells you to pay by wire transfer, cryptocurrency, or by mailing cash, stop and find another seller. That’s how scammers tell you to pay.
- Keep records. Save copies of your receipts and order confirmations from online orders. Hold onto them until you get what you ordered and know you won’t return things.
If you spot a scam while shopping, you are advised to report it to the FTC at ReportFraud.ftc.gov.
Set a Budget
Identifying exactly how much you can afford to spend before you begin shopping and setting a strict list helps in not overspending, says gobankingrates.com.
That budget can help you stay calm and focused so you don’t get too caught up in the buying frenzy or become susceptible to stores special gimmicks to spend more.
Shopping early in the season with a plan provides more time to wait for the right deal, make sure items will be shipped and received on time, according to gobankingrates.com
Redeeming accumulated credit card point can be a fiscally smart move at this time of year to increase purchasing power, financial experts say, because you may be able to buy entire gifts by just using points you have saved throughout the year.
But, overall, it is best to avoid paying on credit when at all possible. This is where sticking to a thoughtfully constructed budget can help.
Charging holiday gifts to your credit card does earn points, but make sure you don’t spend more than you can pay off right away. Credit card interest could make holiday purchases 15 to 20 percent higher, according to gobankingrates.com