"I'm more excited about the supply chain enabler side of it, that's actually building some of that tech to help brokers get more efficient, help shippers get more efficient, and help carriers get more efficient."
2023's Holiday Spending Outlook
Amid economic uncertainties, the 2023 holiday season sees a mix of record spending projections and retailer caution.
As the 2023 holiday season approaches, a complex picture emerges: one of record spending projections juxtaposed with retailer caution. Here's an in-depth look:
Spending Projections: According to the National Retail Federation (NRF), holiday spending is expected to grow 3-4% over 2022, reaching an estimated $957.3 to $966.6 billion. This pace aligns with pre-pandemic trends and is significantly lower than the surge witnessed in recent years.
Consumer Resilience: Despite inflation and economic agitation, consumers exhibit resilience. The average planned holiday spending stands at $875, an increase of $42 compared with a year ago.
However, this anticipated spending spree is tempered by retailers' apprehensions. The CNBC Supply Chain Survey highlights retailers' concerns about weak consumer spending and potential recession risks. Big box retailers like Target have noted a reduction in consumer spending, even on essentials like groceries.
- Retailer Strategies: In response, retailers are cautious with inventory decisions, reflecting the uncertainty in the U.S. economy. Logistics companies, too, are bracing for a season that mirrors severe recession conditions.
- Import Trends: There's been a significant downturn in imports. Categories like TVs, computer monitors, footwear, toys, and smartphones have seen reductions of 20% or more in the nine months through September 2023 compared to the previous year. Bicycle imports are down 41%, and smartphones declined 16%, indicative of businesses planning for a quieter holiday season.
- Consumer Shopping Behavior: While spending is expected to be robust, the search for deals and discounts is more pronounced. Many consumers plan to start their shopping in early November, but a significant number are waiting for Black Friday sales, indicating a trend towards staggered shopping.
In summary, the 2023 holiday season is shaping up to be a period of contrasting dynamics: promising spending levels driven by consumer eagerness for value against a backdrop of retailer caution and economic unpredictability. This dual narrative will define the logistics and retail landscapes, influencing everything from inventory management to shopping patterns.