Tanzina Vega: All this hour we've been talking about business from the very big, to the very small. To round out the show, we're going to turn to the consumers to ask how spending could look different during this year's holiday season. Black Friday is this week and normally the biggest shopping day of the season, but COVID means a lot fewer so-called doorbuster deals and mobbed department stores, and a lot more people headed online from the beginning. We asked you how your spending habits may be changing this season in the face of COVID.
Cheryl: Hi, this is Cheryl calling from Stanford. Thankfully, my husband and I still have our jobs. The only difference this year is that we've done most of our shopping early and online so that we can hopefully avoid all the shipping delays and any possible COVID exposures.
Speaker 1: I am going to be making some changes this year with holiday shopping. I'm going to make a strong effort to buy locally and from small businesses, because they've all been hurt so badly this year.
Keith: Hi, this is Keith from Dallas. For Christmas, we are going to have our kitchen re-done and place that money that we would have spent for Christmas presents into our home.
Matt Brazil: It's Matt Brazil in San Jose, California. This year because of COVID, I'm making sure that I spend in small businesses where the business gets to keep the money, instead of some big corporation online that enriches shareholders.
Speaker 2: The historical Wayside Inn in Sudbury, Massachusetts has started a fund for Brown, Indigenous, and people of color to do programming around their lives and culminating on Giving Tuesday. I'm going to put my money where my mouth is because it takes more than just putting their sign on the lawn.
Tanzina: Here to talk about what the COVID holidays will look like for consumers is Ayalla Ruvio, an associate professor for the department of marketing at the Broad College of Business at Michigan State University. Welcome to the show Ayalla.
Ayalla Ruvio: Hello and thank you for having me.
Tanzina: We just said that the holiday season will probably have folks migrating online. What do we know in terms of how much people are looking to spend this year? Are they going to be making different choices about holiday spending?
Ayalla: COVID really accelerated a lot of patterns and trends that we've seen in recent years. One of them is the switch to more shopping online and obviously, that will increase. Data suggests that about 28% are saying that they're going to cut down on their spending this holiday season but it's more like I'll start dieting tomorrow. I think we'll see that although maybe people are planning on spending less. I don't think we'll see much change in spending; we'll see more change in what people are spending on.
What are they buying? We certainly see that people are buying more things that they could do at home or they can use at home. We just heard about that person is going to renovate his kitchen, all kinds of do-it-yourself type of projects. Xbox and PlayStations are rocketing sales right now. Everything that has to do with spending time at home will sell very, very well.
Tanzina: Black Friday is this Friday coming up. Retailers generally open the doors and we see those scenes of people mobbing department stores. That's not going to happen this year. Black Friday deals are all across the internet. What other things are retailers doing to try and meet their bottom line for what's usually a very busy shopping day?
Ayalla: Yes, retailers are getting very, very creative, so does consumers by the way, but retailers cannot create that excitement of Black Friday in the store as they did before COVID. Certainly, what they will do instead of having special deals that are only offered in-store to generate food traffic, they will offer things online that will be either limited time or exclusive offers to members or loyal consumers or things that will generate the same level of excitement, but online and not in the store.
Tanzina: We were just talking about small businesses. I'm wondering whether or not, you mentioned this earlier, but will we see some of these businesses have actually gotten creative enough to stay afloat during the pandemic. Some of them are resilient in that. I'm wondering if they'll see a little bit of a bump from consumers who want to support their local businesses.
Ayalla: Listen, all businesses are hurting, big and small, but certainly small businesses have less resources to stay resilient especially in times like these. Before the pandemic, there was again, a shift in trend where more consumers were looking for those special items, unique items, things that big retailers cannot offer. We saw a surge in sales when it comes to small businesses. Hopefully, that will come back. Certainly, consumer wants to support their local businesses and will help them go through these times.
It's really is a matter of resilience and what are the resources that small businesses have in order to stay afloat, which is not easy, and not all businesses obviously can do it. Especially when everybody's switching online, not all businesses have a good online infrastructure for selling, to begin with, or are able to do so. Certainly, there's a lot of willingness from consumers to support small businesses in their community. We'll see that continues.
Tanzina: We're also hearing a little bit about how consumers might be facing shortages again in essential products like toilet paper. The famous toilet paper runs and bottled water potentially. Do you expect that that'll happen if in the next couple of weeks as stores start to tighten up in anticipation of a potential, not maybe not a full lockdown, but definitely more modified behaviors expected from Americans as we try to fight this COVID pandemic.
Ayalla: If we have any shortage, my guess it will be a very short term one. I think that retailers are preparing for that. They solely will be much more prepared than they have been in March when everything's just crashed on us. I think what creates shortage is a sense of urgency. I don't think consumers are experiencing or exhibiting the same sense of urgency they did in March.
I think they're managing the situation much better. They have a better sense of control over the situation. The sense of urgency is not that steep and they can certainly manage that. The lockdown, the new restriction are being administered differently across states. Not in every state they're forcing you to stay home. I don't think we'll see the same level of shortage or urgency from consumers for sure.
Tanzina: Ayalla do you have one tip for people who might be shopping online this year? Something that they should be careful of or avoid, or do?
Ayalla: Yes. Consumers are going to spend about $400 million on the internet this holiday season. Just be careful. There are a lot of scammers out there looking to make a buck. Don't help them. Be careful with what you're reporting with your credit card information with your personal information, but have fun. This is a holiday season. Just have fun.
Tanzina: Thanks for that reminder. Ayalla Ruvio is an associate professor for the department of marketing at the Broad College of Business at Michigan State University. Ayalla thanks so much.
Ayalla: Thank you so much for having me.
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