By Nick Erickson
The holiday shopping season kicks off in full gear this week with Black Friday and Cyber Monday, two of the largest consumer days of the year. Donna Hoffman, the Louis Rosenfeld Distinguished Scholar and Professor of Marketing and the co-director of the Center for the Connected Consumer at the George Washington School of Business, is a renowned expert on consumer psychology and the consumer experience. Her expertise has been cited 30,000 times on Google Scholar, and she has been published in the field’s top journals and is frequently quoted by major publications.
She spoke with GW Today about what to look for this holiday shopping season, including the economy’s impact, the rise of online consumerism and advice to consumers.
Q: How do you see the current state of the economy and inflation rates affecting holiday shopping this season?
A: I think it’s a tale of two worlds. Some folks are still working, still flush and will be able to shrug off the impending recession, inflation at the gas pump and the grocery store, and travel and gift-give and make merry as usual. Others are maxing out their credit cards, wondering how they will be able to put food on the table and worrying about the stability of their jobs. And let’s not even talk about rising rents or mortgage rates. And certainly, don’t forget about COVID. Vaccine uptake has really diminished, increasing numbers of Americans are suffering the effects of long COVID, pediatric hospitals are filling up, and the holidays, typically spent indoors with far flung family, are upon us. (At least deaths are down.) All in all, plenty of stress to go around for many folks.
Q: COVID-19 restrictions have eased compared to the last two holiday shopping cycles. What do you expect will be different about this season compared to 2020 and 2021, and are there any changes from those two years that you think will be here to stay?
A: I think online shopping is important and now fully ingrained. It’s much easier to shop for bargains and comparison shop online. It’s less stressful. And it’s cheaper and more convenient. I think for these reasons we’ll see plenty of online shopping this year. But I’m sure folks will also be out in force roaming the malls, if only for the experience.
Q: In general, how has online consumerism changed the holiday shopping scene that in the past was often marketed through the nostalgia of window shopping on a main street with snow falling? Will there still be opportunities in the future for mom-and-pop shops to find success in the late November/December time slot?
A: I think the bigger picture here is that people want to live in “walkable” neighborhoods where everybody knows your name. There’s a general yearning for community that is not being satisfied by the giant sucking sounds of social media. It’s hard to predict what will happen going forward, but I’m very excited about how energized Gen Z folks are. I think they are going to save the world.
Q: What is some advice for consumers this holiday season? What trends, warning signs, discounts, etc., should shoppers be keeping in mind?
A: Don’t put it on credit! If you can’t afford it, don’t buy it. While credit card balances shrunk during the pandemic, the new Fed report shows that year over year balances are now way, way up. [The third quarter of] 2022 is the highest balance increase we’ve seen in 15 years! Further, analyses shows that it’s the lower income consumers who have the higher-than-average balance increases. So, clearly, higher prices are taking a toll, and some people are struggling to keep up. It sure feels like a recession is looming, so maybe it’s not the best idea to blow a lot of cash this holiday season. Focus on friends, family and being sustainable.