COVID-19 is changing the way we buy gifts this holiday season, research says
The coronavirus pandemic is affecting the holidays in a number of ways — and the way we shop is no exception.
Every year, millions of people rush to crowded stores for Black Friday, including more than 124 million people last year, according to the National Retail Federation.
But this year, with coronavirus cases surging across the United States, the Centers for Disease Control and Prevention has listed “shopping in crowded stores just before, on, or after Thanksgiving” as a “higher risk activity.”
Stores have changed their Black Friday plans because of COVID-19, including extending sales, limiting store capacity, offering curbside pickup and turning stores into fulfillment centers.
Walmart announced it would offer three sales events in November, McClatchy News reported. Best Buy also adapted by plotting out an intricate curbside system to promote social distancing and Macy’s limited its annual parade to one block near the flagship Manhattan store, according to The New York Times.
The changes go beyond Black Friday, too, as consumers shift their behaviors to shop for gifts during the pandemic.
Sales up from last year
The National Retail Federation predicted “holiday sales during November and December will increase between (3.6%) and (5.2%) over 2019 to a total between $755.3 billion and $766.7 billion.”
“Consumers have shown they are excited about the holidays and are willing to spend on gifts that lift the spirits of family and friends after such a challenging year,” Matthew Shay, NRF president and CEO, said in the release. “We expect a strong finish to the holiday season.”
Retail sales increased 10.6% in October 2020 compared to last year, partially because “holiday shopping provided a strong boost,” according to the NRF, which says its analysis excluded “automobile dealers, gasoline stations and restaurants.”
Starting earlier
The NRF said 42% of holiday shoppers reported they started buying earlier than usual this year. By early November, 59% of shoppers said they started buying gifts for the holidays, “a 21% increase from a decade ago,” according to the release.
“Consumers have welcomed the longer shopping season, where many retailers have chosen to offer deals before and leading up to the traditional Thanksgiving and Black Friday doorbusters,” said Phil Rist, executive vice president of strategy at Prosper Insights & Analytics, which collects “consumer intent” data from the U.S. and China.
What consumers are buying
A Prosper survey showed that consumers “plan to spend an average of $997.79, down $50 from 2019 as they focus on gifts rather than purchases for themselves,” the NRF said.
Fifty-four percent of shoppers surveyed said they’re shopping for clothes and accessories the most, “followed by gift cards/gift certificates (49%), toys (37%), books and other media (34%) and food/candy (28%),” according to the NRF.
How consumers are shopping
People are buying more online, “with ecommerce sales up (36.7%) year-over-year during the third quarter,” the NRF said.
The organization predicts “online and other non-store sales…[to] increase between (20%) and (30%) to between $202.5 billion and $218.4 billion, up from $168.7 billion last year.”
Shoppers are mostly using credit cards (42%) to buy gifts this season, with debit cards close behind (41%), according to the NRF. Only 15% of “consumers listed cash as a top form of payment during the holidays, the lowest in the survey’s history and likely related to the coronavirus.”
About half of shoppers say they will use Venmo, Samsung Pay, Apple Pay and PayPal, the release says.
The NRF says it considered “a variety of indicators” to predict consumer trends, “including employment, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather.” The organization considers the holiday season to be Nov. 1 through Dec. 31.
The NRF surveyed 8,362 “adults consumers” between Nov. 2 through Nov. 9 “and has a margin of error of plus or minus 1.1 percentage points.”
