Retail Expert Observes Holiday Shopping Trends
Katie Thomas, a retail expert and leader of the Kearney Consumer Institute, conducts observations at retail locations such as Ross Park Mall to analyze consumer shopping habits and derive insights into economic conditions and future trends.
Consumer Motivation: The Search for Control
Thomas identifies a significant motivator for American shoppers as the pursuit of control. Consumers are reportedly seeking agency through their spending habits, influenced by a series of events including a global pandemic, inflation, tariffs, and geopolitical instability.
Thomas characterizes current shoppers as "frugal consumers," noting a broader form of frugality that encompasses careful allocation of money, time, and energy, rather than traditional penny-pinching. This behavior is attributed to a widespread sense of exhaustion.
Manifestations of Consumer Control
This desire for control and agency is evident in several consumer behaviors. Examples include shopper boycotts against specific brands, a consumer preference shift from name-brand groceries to store-brand alternatives, and an evolving aesthetic. Following a period dominated by neutral tones, there is a renewed interest in vibrant colors, maximalist designs, and distinctive items rather than basic purchases. Thomas states that this reflects a desire for individual expression.
Economic Contradictions: Sentiment vs. Spending
The observation of consumers purchasing unique items occurs concurrently with a narrative suggesting cautious consumer behavior and budget tightening. This reflects a dichotomy in the current economy: consumer sentiment measures are near post-pandemic lows, while retail spending continues to increase. The National Retail Federation projects holiday spending will exceed $1 trillion for the first time, though Thomas's own forecast, while significant, is more conservative.
The "Why" and "How" of Current Spending
Thomas highlights the psychological aspects of consumer spending, focusing on the "why" and "how." Current spending is partly attributed to the celebratory nature of the holiday season and a desire for normalcy, with shopping having been identified as a highly missed activity during pandemic lockdowns. Regarding "how" spending occurs, a substantial portion is supported by wealthier individuals benefiting from stock market performance or increased home values. However, spending is also observed among other consumer groups, supported by wage growth exceeding inflation and stable unemployment rates.
Selective Spending and Anticipated Discounts
Consumers are demonstrating increased selectivity and a focus on value, a trend noted by various retailers, including Target. Target executive Richard Gomez stated that "Guests are choiceful, stretching budgets and prioritizing value." Thomas observes that shoppers are reconsidering or omitting non-essential purchases, such as additional stocking stuffers, which were more common during earlier shopping periods. A shopper interviewed at Ross Park Mall, Shea Harmison, indicated a shift towards purchasing only useful items for the holidays. Thomas, supported by analyses from entities like Adobe Analytics, predicts that retailers may implement deeper discounts than initially planned this holiday season to attract consumer spending.