Inflation concerns, social media trends and new payment options will make for another unprecedented holiday shopping experience. Here, four Montclair State consumer and economy experts share predictions and observations about the 2023 holiday shopping season.<\/p>\n
These days, our dollars must stretch further and further, but retailers hope that won’t stop shoppers from getting caught up in the holiday frenzy.<\/p>\n
Manveer Mann<\/a>, associate professor of Marketing, says the holiday shopping period has shifted over the years such that it starts early and promotions have become a key component. “This year, given the inflation and high cost of living, promotions could be even more important,” Mann says. Start looking for early access sales and special promotions from from your favorite retailers ASAP.<\/p>\n Some Trader Joe\u2019s locations have an \u201cAs Seen on TikTok\u201d shelf of popular items. Visit your local Barnes & Noble and you may see new recommendations under a sign that reads \u201c#BookTok.\u201d<\/a> And if you\u2019re driving from Ulta to Ulta trying to track down that mascara<\/a> your niece has on her wish list, forget it \u2013 it\u2019s sold out, thanks to the all-knowing algorithm and viral trends that have users flocking to brick-and-mortar stores and online retailers.<\/p>\n Mann says that consumer shopping habits have certainly evolved as a result of social media, algorithms and influencer culture.<\/p>\n \u201cMany studies have shown that social media plays a significant role in driving purchase decisions,\u201d Mann says, citing research that has identified two key variables that impact purchase intention: social influence of peers and the quality of information available. In today\u2019s world, the latter could reference the power of the almighty, all-knowing influencer.<\/p>\n \u201cContent creators have been playing a growing role in shaping \u2018what is cool,\u2019\u201d Mann says. \u201cIt serves as a two-way communication channel that can disseminate information much more effectively than the traditional forms of marketing communication.\u201d<\/p>\n Patrali Chatterjee<\/a>, professor of Marketing, adds that TikTok is perhaps the most powerful social platform in driving shopping trends and behavior. \u201cIt is completely video-based, which is more engaging than other formats.\u201d<\/p>\n What viewers are exposed to is decided by the algorithm, she explains. \u201cIt relies totally on the user\u2019s location, their actions on the videos and how long they watch to uncover their preferences and interests in that instant.\u201d<\/p>\n Because the user is passively scrolling and their attention is completely immersed in the video on the screen, the defenses of cynicism or counter-arguing are low, making it easier to believe claims in the video. \u201cIf they are enjoying the experience, they will not want to leave the app to check reviews or comparison shop,\u201d Chatterjee says.<\/p>\n So if you want to guess what you should be gifting your internet-savvy relatives and loved ones for the holidays, just browse the \u201cTikTok Made Me Buy It\u201d tags.<\/p>\n Trying hard to stick to a budget but still eyeing that big-ticket item? Several \u201cBuy Now, Pay Later\u201d (BNPL) services including Afterpay, Klarna and Affirm have joined traditional payment options on online retailer sites, and we will likely see them grow in popularity, according to Archana Kumar<\/a>, associate professor of Marketing.<\/p>\n Most work like this: As customers check out and select one of these platforms, their order totals are broken down into four equal payment installments, the first of which is charged at the time of purchase; installments of the remaining balance are charged automatically every two weeks thereafter. The majority of these new platforms have transparent terms, do not charge interest or run credit checks \u2013 all appealing to consumers, Kumar says, especially since they can pay off their \u201cdebt\u201d in just a few installments.<\/p>\n Retailers benefit too, Kumar says. \u201cPayment plans generally encourage consumers to purchase more or purchase a high-price product that they would not have otherwise.\u201d Kumar points to other pluses for retailers<\/a>, including a decrease in shopping cart abandonment and fewer returns of items purchased via BNPL.<\/p>\n But Kumar warns shoppers to note the drawbacks of such services. \u201cThese options could lead to overspending, [consumers] could fall behind on payment,\u201d she says. \u201cAnd once consumers get used to shopping with these payment installments, interest fees may be introduced in the future.\u201d<\/p>\n Certain consumer groups, the Gen Z segment in particular, says Mann, are engaged in sustainability and will opt for gifts that have green options. “However, sustainability attributes should be an add-on and not the core proposition,” Mann says. “Any brand or product first needs to deliver on basic product attributes such as quality.” The sustainability add-on can then instrumental in driving sales.<\/p>\n Last year countless stories warned shoppers about supply chain issues and bottlenecked cargo ships that would cause delays or low inventory. This time around, the buzzword is inflation. Luis Portes<\/a>, professor of Economics, expects a push and pull between those worried about spending and the benefits of a hot labor market.<\/p>\n Portes explains that inflation is running at a 40-year high and unemployment is at a 50-year low. \u201cA low unemployment rate means that people have jobs, plenty of jobs, and as the spending multiplier story goes, your spending is someone else\u2019s income, which in turn becomes spending, and so on,” Portes says. “On the other hand, the experience of unusually high inflation puts consumers on the defensive, or even in a precautionary stance.”<\/p>\n \u201cThe news about inflation and worries about higher prices for holiday shopping are likely to come true and extend until the circuits of global trade and shortages in specific sectors get unclogged and resolved,\u201d he adds.<\/p>\n Of course, there\u2019s always a Plan B if the recipient\u2019s wishlist items are sold out because of TikTok, or were too expensive (even with a payment plan). Portes says we may see many opt to go the DIY route in terms of gift giving, or offer other nontraditional gifts such as \u201cexperiences\u201d \u2013 tickets to a show, a gift certificate to a local restaurant or more.<\/p>\n The latter is a trend that started before the pandemic and may continue to grow, Mann says, as more consumers choose to spend their money differently. “There is also a highly-engaged sustainable consumer, who may choose to spend less on physical products but prefer experiences with family and friends as a holiday purchase.”<\/p>\n To interview our economy and consumer experts, please contact the Media Relations team.<\/a><\/p>\nLook to TikTok for holiday gift guides<\/h2>\n
‘Pay Later’ shopping apps encourage more buying<\/h2>\n
Sustainable gifts for Gen Z<\/h2>\n
‘Tug of war’ between inflation and low unemployment<\/h2>\n