Four new types of U.S. shoppers have emerged this holiday season.
There’s the bargain hunter who times deals. The midnight buyer who stays up late for discounts. The returner who gets buyer’s remorse. And the “me” shopper who self-gifts.
It’s the latest shift by consumers in the fourth year of a weak U.S. economy. Shoppers are expected to spend $469.1 billion during the holiday shopping season that runs from November through December. While it won’t be known just how much Americans spent until the season ends Saturday, it’s already clear they are shopping differently than they have in years past.
“We’re seeing different types of buying behavior in a new economic reality,” says C. Britt Beemer, chairman of America’s Research Group.
THE BARGAIN TIMER
Cost-conscious shoppers haven’t just been looking for bargains this season. They’ve also been more deliberate about when to find those deals. Many believe the biggest bargains come at the beginning and end of the season, which has created a kind of “dumbbell effect” in sales.
For the week ended Nov. 26, which included the traditional start of the holiday shopping season on the day after Thanksgiving, stores had the biggest sales surge compared with the prior week since 1993, according to the International Council of Shopping Centers-Goldman Sachs Weekly Chain Stores Sales Index. The cumulative two-week-sales drop-off that followed marked the biggest percentage decline since 2000. Then, stores had another surge in the final days, as retailers stepped up promotions again.
“Shoppers are budgeting their money and time,” says Paco Underhill, whose company, Envirosell, studies how consumers behave in stores. “They’re focused on being opportunistic bargain-shopping vultures.”
Shoppers expect bigger discounts later in the season. According to America’s Research Group, about one-third of shoppers say they want to see post-Christmas discounts of up to 80 percent.
THE MIDNIGHT BUYER
Bargain shoppers used to wake up at the crack of dawn to take advantage of big discounts on Black Friday, the day after Thanksgiving. This year, some shoppers instead stayed up late Thanksgiving night.
This shift in behavior was in large part due to retailers’ efforts to outdo each other during the traditional start to the holiday shopping season. Stores such as Macy’s, Best Buy and Target for the first time opened at midnight Thanksgiving night, offering deals that once were reserved for the next day.
Twenty-four percent of Black Friday shoppers were at stores at midnight, according to a poll by the National Retail Federation, the industry’s biggest trade group. That’s up from 9.5 percent the year before when only a few stores were open during that time.
Of those shopping at midnight on Black Friday, 37 percent were age 18 to 34. Older shoppers weren’t as quick to run to the malls. Only 23.5 percent of 35- to 54-year-olds were in stores by midnight.
Macy’s drew 10,000 people to its midnight opening. Terry Lundgren, Macy’s CEO, says many were young people who sought Justin Bieber $65 gift sets and discounted fashions.
Shoppers who were lured into stores by bargains gleefully loaded up on everything from discounted tablet computers to clothing early in the holiday season. But soon after, many suffered a case of buyer’s remorse and rushed back to return some of the items that they bought.
For every dollar stores take in this holiday season, it’s expected they will have to give back 9.9 cents in returns, up from 9.8 last year, according to the a survey of 110 retailers the NRF. It would be the highest return rate since the recession. In better economic times, it’s about 7 cents.
Stores have themselves to blame for the higher returns. They lured shoppers in with deals of up to 60 percent off as early as October.
Because of the deals, shoppers spent more than they normally would. And retailers’ policies have been more lax since 2008.
THE ‘ME’ SHOPPER
One for you; one for me.
After scrimping on themselves during the recession, Americans turned more self-indulgent.
It’s a trend that started last year, but became more prevalent this season.
According to the NRF, spending for nongift items will increase by 16 percent this holiday season to $130.43 per person.
That’s the highest number recorded since it started tracking it in 2004.
“This season, the consumer put herself ahead of the giving,” says Marshal Cohen, chief industry analyst with market research firm The NPD Group.