Tariffs And Shipping Could Shape 2019 Holiday Retail

You may have already seen the Christmas commercials and been lucky – or unlucky – enough to have heard some holiday music already this autumn. Yes, the holiday shopping season is gearing up – that time when retail needs to prove itself once more.

Retailers are certainly in the swing of things.

For instance, Walmart is starting its holiday shopping season early, citing fewer shopping days between Thanksgiving and Christmas. The retailer is advertising deals for the season “earlier than ever” and will begin rolling them out on Friday (Oct. 25), CNBC reported. The company said shoppers will be able to find deals on its website, like $25 off a BouncePro 7-Foot My First Trampoline and $100 off a VIZIO 55-inch Class M-Series Quantum 4K Ultra HDR Smart TV. Walmart said it would debut new deals regularly as the season progresses, and is also offering free next-day delivery for the first time.

Same-Day Shipping

Best Buy also announced it will offer a similar shipping option for thousands of its items, and Target shoppers can get items shipped the same day by paying a flat fee of $9.99 per order.

To make things easier for shoppers, Walmart is also introducing a gift finder on its website and will launch a digital toy catalog on Nov. 1. The retailer is also planning events based on popular culture, with Pokemon, Frozen and Star Wars on the roster.

To help reduce lines, Walmart will offer express checkout manned by employees with tablets. Aiming to attract more kids and parents to the store, the retailer is trying to make the experience as enjoyable as possible.

Consumers are most concerned with getting good deals around the holiday season, according to a recent study by Deloitte. Purchasing decisions are mostly driven by promotions, according to 81 percent of people surveyed. The study also showed that free shipping is more important than the speed at which an order arrives, according to 85 percent of people.

The National Retail Federation expects a bump in sales for November and December, from somewhere between 3.8 and 4.2 percent. It also said “uncertainty over trade” could potentially harm sales.

Tariff Worries

That doesn’t mean all is cheerful going into the holiday shopping season. Concerns about tariffs abound.

According to new data from AlixPartners cited by RetailDive, only 31 percent of consumers are planning to spend the same or more than they did in 2018. That figure is compounded by data that indicated fewer consumers are reporting stronger financial health than 12 months ago and that fewer believe the economy is still improving.

As many as a fifth of consumers say their holiday budgets will be reduced this year if tariffs increase the prices of items more than 10 percent. What will be consistent year to year, according to the report, is the timing of holiday shopping. Most, 92 percent, say they will start shopping at the same time this year as they did last year, or perhaps earlier.

The figures from AlixPartners counter various predictions calling for strong year-on-year advances in holiday spend, raising concerns that consumer confidence is weakening as the fourth quarter – when the bulk of holiday shopping happens – is starting up.

“We saw a dramatic drop-off in consumer sentiment and future outlook in this year’s survey,” Roshan Varma, a director in the retail practice at AlixPartners and a co-author of the study, said in a statement.

The tariff hike of 15 percent that appeared earlier this month tags items that traditionally are big holiday sellers – smartwatches, drones, TVs, headphones and smart speakers. It is a trait they share with the items in the next expected round of tariffs, which include smartphones and video game consoles.

Get ready for another holiday shopping season – it could be an eventful one.