It’s only early October, but price-weary Americans are already calling an audible on holiday shopping -- more out of necessity than preference.
According to Jungle Scout’s Q3 Consumer Trends Report, 55% of U.S consumers plan to change their holiday shopping plans this year in response to rising inflation.
That’s just for starters.
The report also noted 28% of Americans started holiday shopping before September and 70% expect to start before Thanksgiving, representing a “dramatic uptick from the 55% of consumers who gave the same timeframe in 2021,” Jungle Scout said in the report.
There’s more from the study – all of it noting how many consumers are throwing away the traditional holiday shopping playbook and readjusting their own shopping strategies.
- 54% will spend less per person on gifts
- 47% will buy discounted products
- 38% will reduce the number of people they’re gifting
- 36% will spend less on holiday decorating
- 34% will reduce holiday activities/travel
- 25% will buy used/thrift store gifts
- 21% will re-gift/recycling gifts
“Concerns about inflation and the corresponding impact on overall spending are at the highest levels seen this year, and an overwhelming majority of consumers (76%) believe the U.S. is either in a recession or headed for one,” the report stated. “As experts quibble over the official call, most consumers are already experiencing economic uncertainty: 52% say their household income is unstable -- up 36% from three months ago -- and 73% have either reduced or maintained their overall spending levels.”
A Risky Outlook for the Holiday Shopping Season
Whether or not consumers spend, it is pretty clear plenty of people are struggling given multi-decade high inflation, rapid interest rate increases, all-time highs in consumer debt, and savings rates dropping below pre-pandemic levels.
“Many people are turning to credit cards and other forms of debt, such as buy now pay later platforms, for basic living expenses,” said SoFi manager of financial planning Brian Walsh. “Realistically, this should mean people spend less on holiday shopping but instead, people often feel pressure to spend more money during the holidays”
It would be no surprise if holiday spending is high, Walsh said.
“But it would be very concerning since much of it could end up on credit cards, putting consumers further into debt this holiday season,” he noted.
Holiday Shopping Tips: Doing More With Less
Holiday shoppers operating on a tight budget in a high-inflationary retail environment do have options, personal finance experts say. These shopping tips should be front and center through the rest of 2022.
Research now and pre-order. If a new or popular gift is on your shopping list this holiday season, research to see when it is available for purchase.
“Buying it in advance may save you money and stress,” said Top Cashback consumer expert Rebecca Gramuglia. “While pre-orders may seem like a guarantee that you’ll get the product, you’ll still want to purchase the item as soon as possible to avoid the pre-sale running out of stock.”
Even if the item is not a new release, review different retailers to see who has the item in stock. “If it’s a popular item, it may be on back order and may not ship until closer to the holidays,” Gramuglia said.
Stack your savings. In addition to any applicable coupons or cashback offers you find online, save even more by using the right credit card when you shop.
“Look into the terms of your credit card’s program to determine which spending categories will earn you the most rewards or cash back, and be sure to use that card on those purchases,” Gramuglia added.
Create a list. One big step to getting organized this holiday season is building a list of what you’re planning to buy, and it can also help you avoid buying items last minute.
“While the list does not need to include everything at this point in time, it’s good to get a general ballpark amount of how much you plan on spending,” Gramuglia said. “You can use this list to see if there are any noteworthy deals and help you determine if it’s worth buying them early on.”
Create a holiday fund. It’s best to start building your holiday fund as early as possible so you have ample time to contribute to that fund.
“To consistently contribute, consider adopting the 50/20/30 budgeting rule,” Gramuglia added. “You’ll want to spend up to 50% of your after-tax income on necessities, like food and utilities; 20% on finances, such as debt repayments and savings; and 30% on personal expenses like holiday shopping and decor.”
