Credello: Here's Why Household Spending is Likely to Surge This Holiday Season
NEW YORK, December 15, 2021 (Newswire.com) - Household spending always increases around the holidays, but this year has all the makings of being a record-breaking season. Prices are up. That will raise the cumulative number for dollars spent. Merchants are desperate for economic recovery, so they are offering "buy now, pay later" options to entice consumers. This will result in increased consumer debt in 2022.
History has shown us what will happen next. January is the time of year when consumers start looking at new tricks to paying off credit cards. That won't be necessary for you if you curb your credit card spending this month. As for those "pay later" options, those are credit deals also. Some of them are interest-free, but they will still add to your debt next year.
Post-Pandemic Marketing is More Aggressive
Retailers learned some valuable lessons during the 2020 pandemic. With the world essentially closed off from shopping in person, they were forced to revamp their online presence. Some merchants were prepared for this while others had to make major changes to their businesses. This year, outside of Amazon, retailers are taking a hybrid approach with their holiday marketing.
There are discounts and sales everywhere. Shop online and you can save money. Go to the store and you get two-for-ones and red-light specials. Engage on social media and you'll be assaulted with ads and videos from familiar stores and sellers you've never heard of. Everyone has boosted their marketing budget. It's the only way they can survive.
The fallout from 2020 has barely just begun. While strolling through the mall, you may have already noticed several empty storefronts. Stores will continue to close if they don't have a big holiday season. The average consumer spends roughly $1,000 per year when holiday shopping. Retailers will do whatever it takes to have that money spent in their store.
Consumers are Caught Up in the Reopening
The euphoria of being out in public again is also a big factor in consumer spending. The great "reopening" has been tempered somewhat by recent spikes in Covid-19 cases and a new variant, but most people are done with isolation. Department stores and malls, what's left of them, are filling up with happy shoppers looking to make up for lost time.
In 2019, prior to the pandemic, holiday shoppers were conditioned to sales and marketing efforts that had remained unchanged for a decade. This year, retailers are more creative. They're playing on the emotions of a liberated population, offering more "impulse buys" and enticing people with credit offers and "no money down" deals.
Be Careful: Inflation is Still on the Rise
Paying later for your purchases may sound like a good idea today but be careful. Inflation is still on the rise, and you may not have that "extra" money in your pocket when the bill comes due. Higher prices mean larger grocery bills, increased utility payments, and expensive trips to the gas pump. You might be better off just paying cash for most purchases, if you can.
The holidays should be a joyous time and we have a lot to be thankful for this year. We're all survivors of a near fatal catastrophe. Don't let that push you to overspend as compensation for what we lost out on last year. Consumer spending will be higher. That's a given. Your personal shopping doesn't have to be. Take advantage of all those deals and enjoy the holidays.
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Source: Credello
