Before the pandemic, if you can remember that long ago, there was a back-to-school shopping season and a holiday shopping season, and never the twain shall meet. With so much time between August and November (relatively speaking), Nikki Baird, vice president of retail innovation at Aptos Retail, told PYMNTS that consumers don’t usually get into a holiday mindset until at least after Halloween.
Even with Amazon Prime Day taking place in the middle of October last year, Baird said it’s “nearly impossible to get a consumer to think about holiday spending earlier than Nov. 1. They just refuse to think about that stuff.”
But after many people got burned with delayed shipments last year, supply chain constraints still making headlines and rising inflation an increasing concern, consumers have been primed to think about kicking off their holiday shopping early this year.
“Nobody is receptive to that kind of thinking when you’ve just shipped the kids back off to school,” Baird said. “But I do think this year it’s more linked than we typically see, and really the consumer mindset is ‘I might need to kick my shopping off earlier this year … because I don’t know if I’m going to find everything I want and I don’t know if it’s going to cost a heck of a lot more by the time I get to November.’”
Last month, Salesforce projected that costs across the retail supply chain will increase by over $200 billion in the second half of 2021, putting pressure on the holiday shopping season. Inflation is also hitting the retail sector harder than other consumer categories; whereas the U.S. Labor Department cited an increase of 5.4 percent inflation in the second quarter, Salesforce’s Shopping Index indicates the average selling price in the retail sector rose 11 percent year-over-year in the same time period.
Baird said even if consumers are shopping for the holidays earlier, that likely doesn’t mean they’re spending more, as budgets are driven more by where people are economically. With many employers delaying employees’ return to the office, for example, small businesses in downtown districts are struggling, she noted, “so that’s definitely going to impact consumer confidence across a broad swath of people.”
To be sure, many consumers are currently doing little more than just surviving, let alone thinking about shopping plans for November and December. PYMNTS research, in collaboration with LendingClub, found that 54 percent of adult U.S. consumers, or 124 million people, report living paycheck-to-paycheck, including 43 million millennials; there are 73 million millennials in the U.S.
What To Get The Kids
Parents may also struggle with finding the right gifts for their kids this year, and not only because they’re reticent to share what they want under the tree. Toys have been difficult to keep in stock during the pandemic as parents look for “cheap and easy childcare as much as possible,” Baird said, “and so if you walk down most toy aisles, they have been just wrecked.”
Additionally, many of the traditional summer movie blockbusters were missing this year, leaving few opportunities for merchandising and toy tie-ins. Even with the movies released this year geared toward kids, such as “Raya and the Last Dragon” and “Space Jam: A New Legacy,” “merchandise was very hard to find,” Baird said. “No backpacks, no lunch boxes, very few apparel items for kids. Either they’ve blown through them and sold them out entirely, or they just didn’t have a lot to begin with.”
That isn’t to say there’ll be nothing to buy, though. Toy giant Mattel, for its part, is leaning into Barbies and Hot Wheels ahead of the holiday season as well as several of its other intellectual properties, including Masters of the Universe. Meanwhile, Hasbro, which has seen its board game sales lagging this year as consumers spend more time outside the home, is focusing on its digital products as well as a handful of action movies released this year.
Baird said she expects “all the usual suspects” to be hot items this year, especially electronics and cell phones. “Parents are giving younger and younger kids phones of their own,” she said, especially after getting so comfortable with having young ones home and easily contacted for so many months. “When they’re thinking about sending them off to school, it just sort of makes them feel better to make sure that their kid has a way of getting ahold of them.”
And although Salesforce in its projections said to expect consumers to increasingly invest in buying experiences as gifts rather than physical gifts this year, Baird said that likely won’t be the case for many families as a COVID-19 vaccine has yet to be approved for children under 12. “Parents are concerned about taking their children to events, especially when you’re talking about closer to winter. … Unless a lot changes soon, that’s not going to be something on parents’ lists.”