A new Intuit QuickBooks-commissioned survey of 9,700 adults and 3,000 small businesses in the US, Canada, and UK reveals it could be a difficult holiday season for retailers.
Doing, not buying
At least two-thirds of the consumers surveyed say inflation will force them to buy fewer gifts this year. At the same time, in the US and Canada, there could be a shift in demand toward experiences, such as entertainment and dining out. Eight out of ten say this is because they couldn’t enjoy these things as much during the pandemic. Employment data from QuickBooks Payroll shows a similar trend—with recreation and entertainment businesses currently among the fastest growing industries.
If economy dips, spending will too
Inflation is making people more price-sensitive, and eight out of ten consumers will cut spending if the economy continues to get worse. As a result, more than seven out of ten consumers surveyed are shopping online more often to find the best deals. Some have protected their holiday season budgets by making cutbacks throughout the year (see How much consumers will spend).
Can small retailers get ahead of this?
Many small businesses, especially retailers, rely heavily on holiday season revenue. In fact, a large majority (up to eight out of 10) of the small businesses surveyed say the 2022 holiday season is more important to their overall financial health than last year’s holiday season. The stakes are high. What can small businesses do to get ahead of these trends?
This article originally appeared on Quickbooks Resource Center and was syndicated by MediaFeed.org.
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Online retailers are eager for your money, and they have several tricks up their sleeve to get you to spend it. Although certain expenditures may be unavoidable, there are ways to save when you shop. And knowing the tricks that retailers use to get you to spend more will help you avoid falling for them. Here’s what to watch out for when you’re shopping online.
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Most retailers offer free shipping if you spend a certain amount of money. This can be a way to get you to buy more than you need, as most people would rather put their money toward tangible goods than a shipping charge.
But if the free shipping threshold is high and you have to pad your order just to meet it, consider store pickup instead. If that’s not an option, you can order from a store that accepts in-store returns and take back the unwanted merchandise you used to pad your order. Or simply buy what you need and pay the shipping charge.
You should consider the shipping charge when you’re comparison shopping as well. If one retailer has an item on sale but will charge a shipping fee, you might be better off buying it full price from a retailer that offers free shipping. Doing the math to calculate the total cost at each store can help you save money.
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If you have an Amazon account with your credit card saved, you know how tempting one-step checkout can be. Just click a button and it’s yours! You don’t even have to take out your wallet. That’s by design.
To avoid making an impulse purchase, experts recommend instituting a waiting period between when you first see an item you’d like to purchase and when you pull the trigger. It could be one day or a week, but make sure it’s enough time to consider the value of the item.
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Waiting to buy, though a great strategy, also invites retailers to hit you again with their marketing efforts. You might receive an email that says, “We’ve saved your shopping cart for you” or something similar.
This can make it hard to walk away from an item, especially if it was something you really wanted. But it’s likely that your decision not to checkout was a good one, so stick by it and don’t click on any follow-up emails.
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Retargeting ads are the reason products you look at once follow you around everywhere on social media. They’re an effective way to get consumers to make a purchase because they advertise products that already hold some appeal to the viewer.
To avoid falling for the trap, don’t make your purchasing decisions based on retargeting ads. Instead, carefully evaluate your budget before spending any money online.
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If you’ve ever signed up for an online account with a retailer, you probably get coupons in your email account for various discounts available to registered customers. If you shop online often, these offers could overwhelm your inbox.
Designate a folder for promotions, and only look at these offers when you need to shop for something. These offers are only a problem if they tempt you to buy something you wouldn’t otherwise purchase. Otherwise, they can be a good way to save money shopping online.
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First-time customer discounts can be pretty appealing, and they can also be useful if you need to try a new product. Just don’t go on an online shopping spree at a retailer you’ve barely heard of simply to snag 50% off. Always spend within your budget, no matter how deep of a discount you can get on an item.
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Most retailers will discount products regularly throughout the year, but they’ll present each sale as a limited-time offer to persuade you to act fast and purchase the product now.
Knowing this can help you avoid overspending in one go to a discount. Instead, give yourself a few months of shopping time before you need to buy an item, and try to snag the lowest price you can during that time. It’s also a good idea to use a shopping app like Paribus, which may help you get a refund if the price happens to drop shortly after your purchase.
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A few retailers, including Amazon, offer you a discount for subscribing to repeat orders. The idea is that you’ll sign up to get the discount, even if you don’t know how often you’ll need the product delivered.
If this results in you having stacks of extra paper towels or bottles of shampoo you can’t use, you’re not saving money, and you’re creating more waste. It’s fine to sign up for subscription-based discounts, but be sure to monitor your deliveries in your online account.
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Again, if you have to buy more than you need to save, you’re not really saving. Bulk purchase discounts make sense for certain items, like toilet paper, which you’ll always use. But if you bring home a case of eggs from Costco and have to look for excuses to make omelets, it’s probably not a useful purchase for you. Don’t buy more than what you can use.
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More retailers are offering point-of-sale financing through lenders like Afterpay, Affirm and QuadPay, Inc. For an expensive item, these offers can seem appealing. Even if you can’t afford a $200 pair of shoes right now, $50 per month is totally doable. These offers are typically interest-free for certain plans, whereas longer terms require that you pay interest.
In most cases, you’re better off saving the money ahead of time than spending it over time. This will ensure you have the money carved out of your budget and won’t accrue interest. However, in certain situations, you can take advantage of these offers. For example, if you need a new refrigerator right away but can’t afford to pay for it all at once, look into point-of-sale financing.
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A lot of retailers offer a generous one-time discount when you apply for a store credit card. For instance, with the T.J. Maxx credit card, you get a 10% welcome discount that’s good for your first purchase.
However, it typically only makes sense to take advantage of these offers if you’re both making a large purchase already and will use the credit card in the future to get perks at that particular store.
Don’t let a new cardholder discount convince you to spend more than you would otherwise. Also keep in mind that applying for a store card constitutes a hard credit check and will cause a small, temporary dip in your credit score.
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Featured Image Credit: iStock / AaronAmat.
