Consumer spending tends to rise around Thanksgiving, as many Americans flock to retail giants like Amazon.com Inc AMZN and Walmart Inc WMT for Black Friday and Cyber Monday deals. Shoppers are expected to spend an average of $832.84 on gifts, food and decorations this holiday shopping season, according to data from the National Retail Federation.
This year's holiday season, the period between Nov. 1 and Dec. 31, is set to tally between $942.6 billion and $960.4 billion in holiday retail sales, up between 6% and 8% from the 2021 season.
This increase is in line with the current inflation rate, which cooled down to 7.7% in October, but remains at its highest level in decades.
While Black Friday and Cyber Monday offer exclusive deals on holiday purchases, November’s discount season can also be a good time for those buying general items for their homes and themselves.
So, is Cyber Monday the best time to make those personal, non-urgent buys, or are those best put off until January?
This season presents special challenges when looking to predict future prices. High inflation, supply chain disruptions and geopolitical instability have led many consumers in 2022 to act on the belief that an item purchased today will be cheaper than the same item purchased next month, as prices across categories have been on the rise.
But it would be reasonable to think that January might see prices drop, as retailers look to unload the items they didn’t get to sell during the holidays.
Historical data can always help us understand macro trends, regardless of this year’s specific factors.
According to data from Adobe Analytics from 2014 to 2021, consumer prices have consistently dropped in November for most categories, while rising in December and January of the following year.
Consumer electronics, one of the largest categories in online shopping for the past decade, is a clear example of this trend.
Looking at this data, consumers planning to gift themselves a new phone, laptop or tech accessory would be better off buying it on Cyber Monday than waiting to get it after the holidays.
From 2014 to 2022, November prices for electronics have dropped between 4% and 6.7% on a monthly basis — when compared to October prices, that's an average of 5.4%
The same category has seen an increase of between 0.5% and 2.8% in December.
January normally shows the highest spikes in prices, which have jumped monthly from 0.6% to a whopping 3.8% in January 2020, right before the COVID-19 pandemic began.
Items in the home and garden category show a similar trend. Large discounts have been registered in November, ranging between 0.8% and 4.6% monthly. Prices have begun to rise substantially for this category in the month of January since 2019, showing hikes of between 1.5% and 2.1% from 2019 to 2022.
The appliances, sporting goods and furniture/bedding categories follow the same trend, with appliances showcasing the amplest swings, dropping between 6% and 7.1% on a monthly basis in November between 2016 and 2020, and rising between 4% and 6% in December in those same years.
One exception to these holiday trends is apparel, the largest consumer category for online purchases, according to Shopify SHOP.
Given the seasonal nature of the fashion industry, prices rise the most in August, ahead of the spring/summer season, and in February, ahead of the fall/winter season.
While recent years have seen the cost of apparel rising mildly in December, 1.2% in 2021 and 0.6% in 2022, prices for clothing and accessories have consistently shown drops in January in most cases since 2014.
Shutterstock image.
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