Retailers brace for a shorter holiday shopping season

With only 40 shopping days left until Christmas, it’s looking like this holiday shopping season will be a bit different from the past few years. With less time between Thanksgiving and Christmas than normal, customers will be packing a lot of their holiday shopping in a shorter period of time.

Why it matters: The holiday shopping season is a critical time for retail credit managers, with a shorter timeline and price-conscious consumers driving increased demand. Effective preparation and risk management are essential to maintaining financial stability and ensuring success during this high-pressure period.

This year’s holiday shopping season will see far more price-conscious shoppers than in years past. Two-thirds of shoppers report that prices will ultimately dictate where they choose to shop this year, according to Salesforce Shopping Index, a steep jump from only 46% in 2020. Furthermore, less than one-third of shoppers will prioritize the quality of the goods.

A growing number of consumers are embracing a strategy known as “slow shopping,” according to a survey by Talker Research for Affirm. The study, which surveyed 2,000 Americans, found that 73% are adopting this approach this year, meaning they plan to start their holiday shopping earlier and make more frequent, smaller trips to stores. However, “slow shopping” doesn’t equate to spending less—68% of respondents said they plan to spend more than they did in 2023 considering inflation.

With more budget-conscious shoppers, it looks like there will be a larger emphasis on discount days like Black Friday and Cyber Monday. While heightened price sensitivity might be a factor in this year’s holiday shopping outlook, B2B credit managers haven’t noted any big shifts in how retailers prepared for the season over the last few months compared to previous years.

Credit managers like Holly McAndrew, senior credit manager global wholesale for Urban Outfitters (Philadelphia, PA), noticed an influx in buying between July and October as retailers prepare for the shopping season. “For the wholesale channel, holiday orders begin in the summer and deliveries begin late September through October,” McAndrew said.

For Anissa Martin, CCE, senior credit manager for Carhartt, Inc. (Dearborn, MI), the holiday shopping season takes a lot of preparation because of how far in advance retail stores prepare for the boom in customers.

“The heart and soul of retail exists over these next couple of weeks, from Black Friday to Cyber Monday to the Saturday before Christmas,” Martin said. “We prepare by making sure that we are getting all the orders out that we have in our system and making sure we meet the demands of our customers so that their stores are outfitted for the holiday season.”

When it comes to preparing for the holiday season, Martin finds her company likes to start in the late summer. “We usually try to get a head start because we knew that there were opportunities with the state of the market, so we probably did get out there just a little bit early having conversations,” Martin said.” We actualized it probably a couple of weeks earlier than we normally would have, but I won’t say that we started too far earlier.”

With inflation and the possibility of a more budget-conscious shopping mindset for many Americans, holiday shopping could be more needs-based this season. “Consumers are buying need-based things as opposed to want-based things,” Martin said. “However, I do think that the impulse-buying bug will get some people because people get festive around the holidays.”

With the port strike in early October, many retailers created contingency plans to account for possible delays in shipment, but many found that the strike did not last long enough to have a massive impact on their preparations for the holidays.

“There’s risk every day,” said Craig Lindsay, credit manager for Skechers USA, Inc. (Manhattan Beach, CA). “I think it’s natural for a credit manager to always be looking over their shoulder, watching news wires constantly and communicating with as many people as they know in the industry to see what they’re hearing. Managing risk is getting more interesting as time goes by, and everyone knows what’s happening to the economy.”

The bottom line: While economic signs point to a slightly reserved holiday season, credit managers have not seen any indication from retailers that the shopping will be any smaller than in years past.