Holiday Shopping 2019

As Thanksgiving fast approaches, the holiday spending projections are coming out of the woodwork. Estimates range from a 3.5 to 5.5 percent increase over last year’s results, despite the fact that the 2019 holiday season is compressed (there are only 26 days between Thanksgiving and Christmas, which is as short as possible).

Although the economy has downshifted to an annual growth rate of about 2 percent from last year’s 2.9 percent pace, consumers have remained resilient and in fact have been the main driver of spending this year, versus businesses, who have hidden their checkbooks in 2019. The reason is clear: more Americans are employed and although wage growth isn’t stellar, with low inflation, rising disposable income is helping confidence remain above the long-term average.  

That said, there are some clouds lingering. As stock market indexes climb to new all-time highs, the not-yet-signed-but-we-are-almost-there U.S.-China trade deal remains an outstanding issue. So too are fears of a recession in 2020, but that might as well be a million years from now, according to the number of people who say they want in on holiday deals. According to Morning Consult, 52 percent of Americans say they are likely shop during Cyber Monday and 45 percent say they will shop on Black Friday. 

Of course the retail holiday season will have winners and losers. Online sales will lead the way with double-digit increases from a year ago, but more shopping is still done in brick and mortar outlets. Retailers have smartened up and used experiential marketing, social media, and a blend of online ordering with in-store pick-up to lure consumers into physical outlets.

It may even surprise you to know that Morning Consult’s analysis finds that more than three-quarters (77 percent) of millennials are likely to go to shopping centers to find gifts. Yes Virginia, even young-uns will shop in real-live stores. Whether anyone ventures into department store is another question. Macy’s, Kohl’s and J.C. Penney all reported weaker quarterly results ahead of the holiday season. The one year stock performance gives you an idea of the problems: Macy’s: -53%, Kohl’s: -29.5%, J.C. Penney: -17%. During the same time horizon, the S&P Retail ETF (XRT) is down 2.25 percent and the broader S&P 500 is up over 17 percent. OUCH!

How NOT to Overspend During the Holidays

Before you get psyched up for the hoopla, let me don my CFP? hat and remind you that those who create lists are far more likely NOT to blow through their coveted emergency reserve funds or pile on debt.

Start the process by going back to last holiday season, tally up what you spent and who you spent money on for gifts. Don’t forget all the gifts of tips to your babysitter, teachers and other service provides. Then create the list for this year and don’t forget the cost of entertaining. As you attach dollar amounts to each line item, remember that research finds that experiential gifts are the most memorable, so consider spending time with someone instead of giving another unused gift card. Consider a special hike, a free museum day, or maybe offer to babysit for a friend or family member.

Technology Can Help

Of course sticking to the game plan is like trying to eat well during the holidays: a laudable goal, but hard to execute. Technology may help you keep you on track. Giftster is a free app that can help organize your gift list and is sharable with friends and family; ShopSavvy allows you to scan the barcode of any product and compare all the best prices available; Shopular provides deals, coupons and location-based notifications; and Honey is a free browser extension that automatically finds and applies coupon codes at checkout for over 30,000 shopping sites.

Don’t Go Crazy

It’s hard not to get sucked into the vortex of the holiday shopping frenzy. Don’t feel compelled to spend on black Friday or cyber Monday as many sales continue throughout the season and have already started. Also, avoid impulse buying for yourself, which can blow up your plan quickly.