Online or In Line, Consumers Still Shopping for Holidays, Mason Experts Say

Posted: December 15, 2008 at 1:00 am, Last Updated: November 30, -0001 at 12:00 am

Shopper paying for items
Although shoppers seem to be spending in the early part of the holiday season, they are shopping a bit differently this year, Mason experts say.

By Jennifer Edgerly

Most of us don’t need to read the news stories about the climbing unemployment rate, failing auto industry and continuing housing market woes to know these are tough times.

With many employers forgoing employee salary increases in the New Year, most Americans are trying to find ways to trim their budgets and make it through the holiday season.

According to a recent study by American Research Group Inc., shoppers around the country say they are planning to spend an average of $431 on gifts this holiday season, down from $859 last year, a decrease of almost 50 percent. The 2008 figure represents the lowest level of planned spending recorded by the American Research Group since 1991.

But It’s Not All Bad News

Fortunately, for those living in the Washington, D.C., metropolitan area where Mason is based, the pain may not be as great as in other parts of the country.

According to Christopher Joiner, associate professor of marketing in the School of Management (SOM), the area has been viewed as being “recession resistant.” The region’s proximity to the nation’s capital and its abundant contracting dollars that provide underlying economic stability are the primary reasons.

“You’re not going to see as many who have to cut back their holiday activities or holiday spending because of the slightly stronger economy, housing market and all those things that make the consumer a little more confident and resilient in this area than they are in many other parts of the country,” Joiner said in a recent interview with The Washington Examiner.

He also commented that, despite the national economic instability, shoppers tend to be less frugal when buying gifts for others than when they buy for themselves.

“They may say, ‘Yeah, I can’t afford to go out to eat as frequently,’ or ‘I can’t afford that new pair of shoes I wanted,’” Joiner said in the same interview. “But when it comes to buying gifts for their family members or their kids, people tend to be much less willing to completely cut back.”

So What Should Retailers Expect?

According to Laurie Meamber, associate professor of marketing in SOM, retailers in the D.C. region are likely to see increased sales, traffic and everything else that takes place during a holiday season in a normal economy.

Laurie Meamber
Laurie Meamber

There could be a little bit of a slowdown in this area, Meamber says, but nothing like the national trends.

“Behaviorally, it seems like there are a lot of people out shopping, and from what I’ve read, shopping online as well,” says Meamber. “The numbers went up across the country and in this area as well” post-Thanksgiving, Meamber says.

“But they are nothing like what we are used to seeing. Black Friday and Thanksgiving weekend sales numbers were up marginally over last year’s numbers, but just a few percentage points and nothing dramatic compared to last year.”

Those consumers who are still out shopping are shopping smarter, Meamber notes. Consumers are choosing to pay with cash instead of using credit cards. They are also trying to buy fewer gifts, and the ones that do make the cut are intended to be meaningful for the recipient.

“I’ve noticed that while consumers have cut back on material purchases such as clothing, they don’t seem as willing to cut back on experience-related gifts such as concert tickets,” says Meamber.

“This is a bit paradoxical in that shops and malls are still crowded, but the numbers haven’t supported that people are really buying more. They are out there, but it might just be for the experience of actually being out and getting into the holiday spirit.”

Forget the Crowds, I’ll Shop Online

While many shoppers turned out early on Black Friday to take advantage of the deep discounts many retailers were providing, others are forgoing the crowds altogether and turning instead to their computers for their holiday shopping.

Melissa Martin
Melissa Martin

“Even though the retail market has been growing very slowly this year, Cyber Monday actually exceeded the dire predictions that had been made,” says Melissa Martin, assistant professor of marketing in SOM, speaking of the day following Thankgiving weekend when online retailers mark down their wares.

“Interestingly, when people talk about Cyber Monday, they are making the assumption that consumers do their online shopping at work, but I don’t think that is necessarily true anymore.”

Martin explains that while many people probably do shop online while at work, these days more families have computers with high-speed Internet in their homes, so Black Friday is a good online shopping day as well.

In fact, experienced such a high volume of online traffic on Black Friday that the web site crashed. However, according to comScore, a marketing research company, Cyber Monday is still the best day for online shopping by a wide margin, with one-day online sales this year totaling $846 million.

According to eMarketer, a market research provider, online Christmas holiday sales for 2008 are expected to total about $32 billion, up approximately 10 percent from last year. This is a slowdown in growth rates from previous years, when increases in the low-to-mid 20 percent ranges were common.

Despite the growth slowdown in e-commerce this holiday season, Martin says that online shopping continues to provide a level of convenience that some consumers prefer, including no lines and the ability to comparison-shop with greater ease. She also notes that many retailers are providing deals or incentives to shop online, such as free shipping.

Even though some consumers prefer online shopping, Martin notes that only about 3.5 percent of total U.S. retail is online, and most consumers still prefer going to the mall.

“For some people, shopping is a social experience and has therapeutic value,” says Meamber. “At this time of year, there is so much to see in the shopping malls, and many people take the opportunity to spend this time with family and friends shopping together.”

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