Tis’ the season to be happy and to buy a lot. 

 

Roots of Christmas

Christmas didn’t start as the massive industry it is today. It has been known to have roots in pagan rituals and it had remained largely a conservative, minor vacation for a long time. Things started to change, however, as the US industrialized. Macy’s in 1874 started to decorate their shops and presented desirable gift packages to the public, while Coca Cola initiated marketing campaigns featuring a certain Santa Claus based on the description of him in a poem. And thus, the modern Christmas, with 178 B $  spent on consumer products every year, with its salesman, Santa Claus, was born. 

 

Consumer Behaviors

There are many differences in consumer behavior during Christmas compared with the rest of the year. Firstly, consumers get an “urge to splurge”, one of the main driving forces in consumer spending. During christmas, people tend to spend money on things that boost their self esteem, primarily due to their happy mood. This also causes impulsive buying, fueling competition among consumers. 

 

FOMO, or the fear of missing out is also present during the holidays. Due to increased marketing, mega offers, and the bombardment of sales through advertising channels, the average consumer is coerced into buying some select products at unbelievable prices, and therefore more goods are bought than previously intended. A societal factor might also be in effect here, as consumers want to demonstrate their economic status and well being to others. Not showing up in stores and abstaining from spending might give the wrong message. 

 

2022: A (Slightly) Different Scenario

The current state of the world economy is a bit… unsteady. A high inflationary environment reigns supreme across the world, eating into consumer’s disposable incomes, energy prices are shot up through the roof, and the full effects of the pandemic on broken supply chains can now be felt in the form of shortages. That is why in the US, Google reports that search results for “good and cheap” products this year increased 40%, and another 83% of consumers report that they saw increases in prices on products they usually buy at the end of the year. No doubt, Christmas is still Christmas and billions will still be poured into gifts, but at a slightly lower amount in 2022. Because of the current economic conditions, you can expect firms to respond with sales, and value-for-money products.