Inflation and the evolution of holiday shopping
MSU marketing researchers Ayalla Ruvio and Forrest Morgeson join Russ White on MSU Today to discuss how inflation is impacting holiday shopping.
Ruvio is an associate professor of Marketing at the Eli Broad College of Business at Michigan State University, and the director of the Master of Science in Marketing Research (MSMR) program. Her research focuses on the wellbeing and behavior of consumers and employees. Morgeson is an assistant professor of Marketing at the Broad College. His research focuses on customer-firm relationships and the financial value of both customer and employee assets to firms.
“Inflation is absolutely impacting holiday shopping,” says Morgeson. “We’re coming off a period of a couple of decades where we haven’t had particularly high inflation, at least by historical standards. So, this has been a massive shock to the system of a lot of consumers seeing these price increases in short order and at a degree we’re simply not used to.”
Price is the most important factor for shoppers, and consumers are changing their buying habits.
“Before, quality was important,” adds Ruvio. “The brand name we buy, service, and convenience were important. Now, only one thing matters, and that is price.”
The duo shares some strategies for consumers to be more cost conscious, like paying with cash. Common strategies include spending more time searching for the best deals, adhering to strict shopping lists, prioritizing necessities, and making purchases earlier to spread out spending.
How have Black Friday, Cyber Monday, and shopping in general evolved over the years?
“We’ve seen huge structural changes to the way people buy and sell goods over the past couple decades, and I don’t think any of that is going to change,” says Morgeson. “With the ability to go online and buy most of what we want via the internet means we don’t really need a Black Friday anymore.”
“What was really striking to see this year is that consumers didn’t get a better deal on Black Friday or Cyber Monday, or in-store as opposed to online,” adds Ruvio. “That really chilled out consumers and their shopping behavior. If companies next year bring back door busters and really good deals in the store, you will see those behaviors again.”
“We’re sort of in an always discount prices environment that we live in now,” Morgeson continues. “There aren’t special days for discounts anymore. Successful retailers need to have low and competitive prices. Thirty or more years ago, a retailer might have had one day where they slash prices. But normally they’re going to have big mark-ups on their items. Those days are over. Everyone now offers really competitive prices because if they don’t, they’re going to get eaten up by the Amazons of the world that are always offering really low prices. It’s sort of always Black Friday now.”
“We expect to see huge deals on Black Friday, and we are not happy when we don’t get what we want,” says Ruvio. “Consumers wait for Black Friday. They want to see a significant drop in prices. If they don’t, they’re not happy. Companies started so early with sales that they lost momentum.”
MSU Today airs Saturdays at 5 p.m. and Sundays at 5 a.m. on WKAR News/Talk and Sundays at 8 p.m. on 760 WJR. Find “MSU Today with Russ White” on Spotify, Apple Podcasts, and wherever you get your shows.