Wednesday, November 19, 2008

Black Friday, Holiday Shopping Looking Up...Considering

You've probably been bombarded with the words "economy", "downturn", and, (yikes!) "recession" over the past few months but, as Tracy Mullin, President & CEO of the National Retail Federation (NRF) puts it, "no one is canceling Christmas because money is tight." To the contrary, while customers will be tightening their belts a bit, they're still going to be out there shopping like they do every other year. They'll just be more mindful of snagging the best deals.

The NRF says that price will play by far the largest role in purchasing decisions this holiday season, with 40% of respondents to its Holiday Consumer Intentions and Actions Survey citing sales or promotions as what they'll be looking for. This year represents the smallest increase in planned spending: up just 1.9% to US$832.36 per person vs. $816.69 last year. But the number is still up, which is a positive sign.

Shoppers will likely cut back on gifts for the family, says the NRF, because they feel their family will "understand their current situation". Surprisingly, however, many will still make personal purchases, waiting until the holiday season to take advantage of the best deals. Overall, the NRF expects holiday spending to increase 2.2% to US$470.4 billion: not too shabby, considering.

As for Black Friday, which is one of the busiest shopping days of the year and scheduled to take place on Friday, November 28 (right after Thanksgiving), the NRF projects that shoppers will be gravitating more toward "personal and practical gifts" instead of big-ticket items this year. The Federation cites things like DVDs, CDs, and books as being most popular in the technology category (55.6%), followed by gaming consoles, Blu-ray players, and other like items (30%). (Funny enough, HD DVD players actually outsold Blu-ray players on Black Friday last year!)

Consumers will be changing one other thing this year: more will be opting to pay by cash instead of credit. But with good enough deals, they will fork over the dough.

Given the number of e-mail notifications I've received over the last few days about product price reductions, it appears that retailers (and manufacturers) are working hard to offer enticing enough deals to keep customers in the shops. Remember: if you don't shop while the economy is in a downturn, you'll only make it worse! (Some may call that female logic, but I digress).

In retrospect, it's eye-opening to think that at this time last year, retail prices were dropping drastically due to the strength of the Canadian dollar. Meanwhile this year, price drops are happening for a completely different, and opposite, reason. But on a positive note, it just goes to show that things happen in waves, and for every downside there's an up. I'm confident that holiday shopping will be just as hot this year as it was last; leading up to bigger and better years to come!

Happy Shopping!

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