The holiday season seems to start earlier each year, now with holiday decorations and promotions beginning as soon as back-to-school shopping has ended. According to Dr. Linda Pettijohn, professor of marketing at Missouri State University, this isn’t a way to spread holiday cheer; it is a competitive retail strategy to win consumer’s disposable income first.

Estimates for holiday shopping are down 3 percent from 2008, according to Pettijohn, and 40 percent of Americans have already begun their holiday spending. There are many motivators for this early splurging, Pettijohn noted:

• Lower inventory levels on popular items
• Layaway options, allowing customers to make payments toward gifts
• Retailer’s promotions, including: Wal-Mart offering 100 toys under $10, Target discounting some of the best-selling toys up to 50 percent before the holidays and the specialty retailers enticing consumers to avoid discount shops

“(Retailers) see sales from the shoppers that are price-driven or willing to spend early to get a sought-after item given that inventory levels are projected to be smaller than last year,” said Pettijohn. “In 2008, the retailers were caught off guard by the economy and this year they have planned on it by reducing inventory levels, offering sales and promotions and offering products over the Internet.”

Although many economic indicators show a healthier economy than that of 2008, customers are leery after a year of turmoil, according to the National Retail Federation’s 2009 Holiday Consumer Intentions and Actions Survey. Consumers will give up quality, service or convenience if they are being price-conscious, and in times like these, most consumers want the best deal for their money.

“In prior years, the mindset was ‘keeping up with the Joneses.’ In 2009, the saying is ‘out-saving the Joneses.’ This mindset challenges the luxury market,” Pettijohn said.

Retail forecasters believe the economy will cause families to purchase more practical or joint gifts or thrift store bargains, while others will turn to making gifts. Another trend Pettijohn reported was using gift cards to buy holiday gifts, essentially “re-gifting.”

With consumers’ eyes fixed on price tags, luxury brands are getting creative to compete for the market, noted Pettijohn. Some are responding by donating part of the product’s price to a charity or creating an interesting way to promote the product. The idea, she added, is to relieve the guilt factor consumers experience for buying expensive brands during this economy.

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