Holiday Shoppings Many Variables

November 26, 2002
| By Katy Rent |
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GRAND RAPIDS — Let the pushing and shoving and bargaining and haggling begin. The holiday shopping season is here and retailers are crossing their fingers.

After a slow season last year, retailers are hoping for a jump in sales this year, but some say those expectations may be too hopeful.

“The prediction is that holiday sales will be up 4 percent this year over last year,” said Steve VanderVeen, Calvin College business and marketing professor.

“Since last year’s holiday season was a pretty lousy year generally, maybe it’s not unrealistic to think we’ll see a gain this year. But to get to 4 percent some important things need to happen.”

He added that forecasting Christmas sales is very difficult, given the number of situational variables.

“There are not only physical and economic variables, but also psychological variables to consider,” VanderVeen said. “And while the economic and physical variables are relatively easy to quantify, psychological variables are probably more important, yet also tougher to read.”

Physical variables consist of things such as the weather, number of stores and inventory levels. In fact, he noted, industry experts claim the weather is particularly relevant for the Christmas shopping season, especially in the northern climate.

“Some snow is probably good, but too much or too little is probably bad,” VanderVeen said. “Just enough snow to imitate a Currier Ives winter print between Thanksgiving and Christmas would put shoppers in the proper Christmas mood.”

Economic variables include how much money people actually have and how many days they have to spend it.

“Thanksgiving comes late this year so there seem to be fewer days for Christmas shopping,” he added. “And unemployment numbers are higher than last year so many people are working fewer hours.”

Psychological variables are related to economic variables and physical variables but are most likely more important. Psychological variables influence how much money people think they have.

VanderVeen noted that job layoffs and corporate downsizing, especially among local “blue chip” companies, and the direction of the stock market have the impact of reducing people’s perceptions of how much money they have to spend on Christmas presents.

Together with fears of terrorism and questions surrounding Iraq, consumers are likely most motivated by fear this Christmas — fear that they can’t afford to spend very much, VanderVeen added.

“The fact that Michigan retailers are expecting a gain of 4 percent in retail sales this Christmas could be realistic given weak sales last Christmas,” said VanderVeen,” or they could be a rosy forecast in the hopes of influencing consumers’ perceptions that good times are just around the corner.”           

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