In the latest episode of “Why!?” hosted by Jeremy Bloom and sponsored by Attain, eMarketer senior analyst Zak Stambor joined Bloom to discuss the 2024 holiday season and how it could be the year that defies all expectations. The culmination of the election, inflation, and the “vibecession” have all made for a cornucopia of unique consumer behavior. 

According to Stambor, consumers are focused on “value,” but that doesn’t just mean low prices. “It means this amalgam of quality, the utility of what it is that they're buying, and price to some extent,” says Stambor. “It's why consumers are splurging on a Chipotle burrito but not buying a McDonald's hamburger.” This signals that consumers are spending less on things with clear signals of inflationary price hikes, but still willing to spend on things that are a little pricier if they think it’s a good deal. He also says that consumers are not buying big ticket items such as appliances and pricey consumer electronics in favor of everyday things such as apparel. 

As we’ve covered extensively in The Outcome, the holiday shopping season has been pushed all the way up into October. Between Amazon Prime Day, Target Circle Week, and Walmart October Deals Week, all retailers are vying for sales, with no choice but to lean into the early bird gets the worm mentality. Additionally, Thanksgiving falls late on the calendar this year, which does not give retailers much time to make their numbers, which may result in even more price cuts coming earlier in the year. 

Yet the biggest and most thorny factor at play is the presidential election. “The week before an election, sales generally fall off a cliff. Everyone is super focused on the election,” Stambor says. In typical election years, retail sales generally pick up immediately following the results and the subsequent excitement over the outcome, both positive and negative. This year, when that excitement will start up is a major unknown, the results are likely to be drawn out, given the various lawsuits and contentions we saw in 2020. “No matter who wins, there are going to be many, many people who are very upset. People could be quite literally marching in the streets, and I don't think they're going to be also marching into Macy's or Best Buy and buying stuff for the holidays,” Stambor jokes. “I think this is something that every retailer needs to be thinking about how November is going to shake out and how that impacts the holiday season.”

Despite the uncertainty, eMarketer is predicting a solid 4.8% growth, which is on the optimistic end of the spectrum of predictions. “Wages are up, inflation is down.” Stambor also credits the federal rate cut as a valuable signal that things are improving, which could lead consumers to pick up their spending. 

When it comes to how brands are protecting themselves, Stambor says they aren’t being conservative or spending less, but they are shifting more dollars into channels like retail media to align with the new crop of October sales events. “Brands are going to have to spend to get people to see their products because Amazon is somewhat of a pay to play platform, and it's a similar sort of situation whether you're talking about Walmart or Target or elsewhere. That alone is going to pull a lot of marketing dollars forward.” Add in the election, it’s not going to be an up-and-to-the-right trajectory. In terms of branding, Stambor recommends that brands avoid getting involved in political controversy at all costs, citing several brand boycotts that did and didn’t work. 

His final prediction for the holiday season is that Chinese companies like Temu, Shein and TikTok Shop will capture a significant share of holiday dollars because they check the “value” box for consumers and a pervasive ad strategy, throwing yet another variable in what retailers and brands have to contend with this year. 

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Watch the full episode of “Why!?” here. 

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