Christmas Shopping
Emily Johnson
WIth snow on the way, Christmas music starting to fill all of the radio stations, and lights going up on every house in the neighborhood, people are starting to get into the holiday spirit. As we all know, with Christmas, comes presents, and with presents, comes shopping. It is this shopping that stores count on all year to increase their sales. According to Wahba, “The holiday season is crucial for many retailers, making or breaking the year for some chains and generating as much as 30% of sales”. This is due to the fact that with the spirit of Christmas in mind, people’s demand for these products increases, in result of the seasons changing. Due to this, stores tend to increase their supply this time of year in anticipation of an increase in consumers. Therefore showing that Christmas shopping has a positive impact on the economy.
As the desire to buy nicer and more expensive presents for loved ones increases, the rate of credit card use has increased over 7% from last year and debit card usage has increased over 3% from last year as well, according to ABC News. With more people spending money, there is more money being put into the economy and more profit being directed towards retail. According to the chart below from the National Retail Federation, you can see how much sales increases yearly in the holiday season. According to Wahba, this shopping season alone (including Black Friday), has an expected rise in industry sales of about 3.6% which accounts to about $655.8 billion. This amount is well above the 10 year clip of 2.5% growth and is better than the 3% rise for the 2015 Christmas period. 
As technology becomes more relevant in our society too, online shopping popularity has skyrocketed as well. Ordering presents has become more popular in recent years rather than driving to the mall or department store, etc. As the graph below from This is Money News, the amount of internet usage in terms of holiday shopping has been increasing since 1999 and will continue to increase, also increasing the amount of sales. The increase of technology enabling availability of products it is much easier for consumers to get their hands on them which results in an increase in quantity demanded which also increases the quantity supplied.
The amount of sales both online and in stores has been increasing yearly. Consumer’s set aside a portion of their yearly income to devote towards holiday shopping as they anticipate the most cheerful time of year. Due to the amount of money spent on presents, it can be seen that this season positively impacts the economy due to the extreme increase in sales per retail store. It is because of these reasons and many others that we can expect a large increase in sales this season. 
Bibliography
"Fears of Big Chill for UK Growth as Christmas Retail Sales Come in Worse than Feared." This Is Money. N.p., 2013. Web. 26 Nov. 2016.
Irwin, Neil. "Don’t Believe the Hype: Holiday Sales Won’t Make or Break the Economy." The New York Times. The New York Times, 2014. Web. 26 Nov. 2016.
Wahba, Phil. "Christmas Sales Are Expected to Be Strong This Year." Fortune. N.p., 2016. Web. 26 Nov. 2016.
After reading this, it's interesting to see that credit card usage increased by 7% just this year. It really shows how technology and new ideas drive the economy in a good and bad way. It's good because suppliers and businesses are making more money, but bad because people are spending more money that they just don't have. Also, I thought that the increasing demand for online shopping keeps going up, I still think people are going out for shopping because then they can see what they are paying for. Personally, I like to go to the mall or other shopping stores because then I can try something on if I need to. It's also a lot easier to return something and get your money back faster than returning something online.
ReplyDeleteOverall this was a really good piece and an interesting topic. Personally I thought that cyber sales would have been higher than store shopping due to the increase in ease. With Amazon prime you can order a gift and it can be at your front door in two days. I found it interesting how many retailers rely on the holiday season to meet their end of year sales. I wonder why the shopping season has such a high expected rise in industry sales compared to previous years.
ReplyDeleteI was surprised to learn that the Christmas season makes or breaks some retailers. That is a lot of pressure to put on one specific time of year. Thinking in theory though, stores should only keep producing if price is above average variable cost, so it must depend a little bit on the rest of the year. Also, selling online seems like an easy way to increase demand because it would not be necessary for customers to live within traveling distance to a company's physical store.
ReplyDeleteIt is interesting to see how much money and how big of an impact Christmas and the things along with it have on our economy. The economic impact of any national holiday brings a large sum of money into our economy. For example thanksgiving brings people into the grocery stores to spend money on things like food and hospitality goods. All these holidays have a very large effect on the economic state of our economy throughout the year.
ReplyDeleteI was surprised to read that Christmas season can bring in up to 30% of sales for the year! This is really a make or break time! I'm wondering though, what stores do after the holiday season is over. If they have a surplus of merchandise, what do they do with it? Especially in a time when the amount of shopping going on has decreased significantly. Can clearance sales really get rid of the left-overs? Also, what if companies experience a shortage of items during the holiday season? I'm curious to know how retailers determine how much merchandise they need to have in their stores.
ReplyDeleteBefore reading this I wasn’t aware of how much the holiday shopping has increased over time. I think that the economy is getting better and smarter with the holiday season because with people's demand becoming higher at this time, stores and online stores are using more and more sales to lure the buyers into buying more and spending a little more, but in return receiving more products. I would have thought that the credit card and debit card usage amount would have gone a lot higher up due to the increase of online shopping. It’s crazy how some retailers have the holidays times getting up to 30% of their sales just in these couple months. Overall, I thought you had really good information and good points to back them up. Nice job.
ReplyDeleteI knew that the holiday season was an important time for retailers but I never realized how important it was. I would have thought that credit and debit card usage would have been higher. Especially with online shopping where most people pay with credit card. I find it interesting that Christmas shopping has increase over the years. I think that it can be hard for retailers to determine how much supply to get for their shoppers. Since the increase in shopping retailers would increase their supply. However, retailers don't want a huge surplus left over after Christmas.
ReplyDeleteOn the occasion of Christmas, the e-commerce companies are going to offer a heavy discount on a variety of products such as Clothing, Footwear, Personal Care, Health, Electronic Device etc.
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