Ready or Not the Holiday Spending Season is Here

For years consumers, economists and commentators tracked the increasingly early beginnings of the holiday shopping season. The day after Thanksgiving – Black Friday – is seen as the traditional start to the holiday spending season, joined in recent years by Cyber Monday for online shoppers.

But the long lines of shoppers waiting in the early morning hours to take advantage of Black Friday deals are largely a thing of the past and no longer represent the start of the spending season but are more properly seen as the height of the holiday shopping frenzy.

It’s not the first decorated wreath or candy cane-themed display heralding the arrive of the holiday season, it’s the hint of pumpkin spice in the air. And this year, that happened in late August, revving up the holiday spending train to make its way through Labor Day, past the autumnal equinox, through Halloween and Thanksgiving and straight on to New Year’s.

The business world divides the calendar into four basic parts with quarterly earnings reports dominating the news cycle. But in a customer-driven economy, corporate earnings matter less than consumer spending. And while people shop and spend all the time, the last third of the year – September through December – is the real holiday shopping season.

But sales figures from those four months won’t be included in the tallying of holiday spending. Nor will they be part of holiday shopping predictions. Despite the availability of 24-hour shopping via the Internet and the steady creep of holiday season cheer earlier and earlier every year, November and December are still seen as the “true” holiday shopping season.

The problem with that perception is it is no longer even close to representing economic reality.

Organizations such as the National Retail Federation offer annual predictions on holiday spending and break it down into different categories for more robust evaluation. But those consumer spending expectations are limited to November and December and no longer reflect consumer habits when it comes to holiday shopping.

There was a time when the Christmas trees and holiday decorations didn’t make their appearance until after Thanksgiving, signaling the holiday season was underway. But with retailers pulling the boxes of tinsel and ornaments out of the stock room earlier and the earlier, it is no longer the bellwether or the season.

More importantly, the holiday spending predictions – and the economic conclusions derived from them – are based on a sample that ignores true consumer behavior. The real holiday spending numbers already are off because of the spread of gift cards. While the cards may have been purchased in December, at the height of the holiday season, they are not counted as holiday spending until they are used, usually in January to catch the after-Christmas sales. Likewise, gift purchases made in September and October are not included in the annual holiday tally, despite the fact they represent actual spending for the holidays.

Holiday spending figures form an important piece of the economic puzzle and influence how people feel about the economy. Media outlets will pore over the data to determine whether retailers had a “good” holiday season or a “bad” one. But without the full data of holiday spending from beyond November and December, that calculation is being done without all the variables. And that can produce a skewed perception of just where the economy is as the year ends.