2008 Holiday Shopping Tips: Part One

By Insurance.com Posted : 11/12/2008

Shopping in a Tough Economy

With the current credit crunch, and the increasing pressure on our wallets, the idea of shopping for gifts this holiday season might seem like a depressing prospect.

Nielsen's 2008 holiday retail forecast is predicting a 4.7% gain in dollar sales over 2007, which is lower than the rate of inflation (4.94% in September 2008)-"a bad sign for retailers. This would be the first decline in consumer sales since 1991.

However, that's still $98 billion in sales and retailers are going to be doing everything they can to get their cut of your holiday spending money. But, smart consumers will use cash more than credit this year.

The Credit Crunch
According to the eBillme Online Spending Index, credit is a problem and consumers are adjusting their spending.

  • 34 percent of consumers are closer to their credit limit than a year ago.
  • 45 percent have used their credit card less often over the last 90 days in favor of non-credit payment options.
  • 55 percent say their available credit has decreased this holiday season.
  • 48 percent of consumers are delaying purchases due to the economy.

Changes in Shopping Habits
Nielsen's research suggests that shoppers will be concentrating on basic needs, and that value will be more important than variety and convenience. This also means that retailers are preparing for more "at home consumption" from shoppers-"less eating out at restaurants or cinema trips, along with less shopping in general.

What Does This Mean for Me?
Retailers will be more competitive, especially for non-luxury items, resulting in more discounts and better deals for the average consumer. Brands and stores are already competing for your spending, so watch for sales and special offers.

Alternatives to credit may be available, though stores are more likely to offer "special deals" if you sign up for their store cards, in an attempt to keep consumers within their store for their purchases. Watch deferred billing offers carefully, because you may incur high interest costs if you fail to meet the first payment due date.

If you do decide to brave the shops this holiday season (and we all will, of course) here are some shopping tips that may help you get the most from your dollar this year. Remember to drive safely when you're out shopping!

Online Shopping
The Internet continues to be a popular way to not only "window shop" for gift ideas, but to actually purchase items too. With air travel still sometimes prohibitively expensive, online purchases may end up being a slightly better option than previous years. Look for free delivery offers to save even more.

According to a study by Harris Interactive, 85% of online shoppers are using the Internet to find good deals online, using price comparison websites (such as PriceGrabber.com or MySimon.com), online coupon sites (such as RetailMeNot.com) and online ads.

And, make sure to ask about for "website only" deals offered by local stores. You can always shop in-person and then buy online.

Layaway
Increasing numbers of consumers are using layaway programs this season as an alternative to purchasing on credit. Many stores that offer layaway ask for a small deposit or fee upfront and may limit what can be put on layaway, such as perishables and clearance items. It's a great way to shop early and stay within your budget, by planning and making your payments before the holidays.

Make sure to get a copy of the store's policy and read it carefully before you decide to use layaway, and keep a record of the payments you've made.

Gift Cards
An alternative to layaway is buying gift cards-"not to give as presents themselves, but to use for your own holiday shopping. This allows you to "set aside" $25, $50 or even $100 at a time into gift cards that can be used like cash for your shopping later in the season.

Some grocery stores offer loyalty cards give you discounts to either gas or food shopping throughout the year. By purchasing gift cards from your grocery store, not only can you sensibly set aside your holiday shopping budget one card at a time, you may actually earn some of these additional "perks" for yourself.

Coupon Clipping
It's a great idea to check your local coupon magazine and newspapers for potential savings-"you may discover an opportunity to save a lot of money by carefully collecting the right kind of coupons.

Discount Stores
In a tight economy, discount stores may offer the best deals for holiday shopping. There is a lot of competition between the large chains and that is good news for consumers. It'll pay to compare prices between stores, and check the clearance sections, too. You may find the items you want at a considerable savings if you spend some time comparison shopping.

Start Shopping for Next Season Early
All of the above tips are good no matter what time of year it is, and it's never too early to start finding bargains for next year's holiday season. Keep your eyes open throughout the year for great deals, and always have a checklist of potential gift ideas in the back of your mind. This will not only help you save money by spreading the expenses of your holiday shopping throughout the year, but could reduce the stress of rushing around for last minute gifts. Unfortunately, that's likely to remain the one unavoidable reality of holiday shopping!

The second article in this series includes a number of driving-related gift ideas to match all budgets.

Do you have any questions or comments? Please let us know.

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