Economic sentiment and consumer behavior are misaligned
Despite positive economic indicators—like unemployment being low and reduced inflation—consumers remain pessimistic about the economy. External factors like political uncertainty and hurricanes may be driving these negative perceptions.
However, consumers’ spending behavior tells a different story. They’re spending, but focusing on value and finding deals.
“Consumers are still spending. If you look just at retail sales, they’re pretty good and that’s why we expect pretty good results this holiday season,” said our analyst Zak Stambor.
US holiday retail sales will grow 4.3% this year to reach $1.353 trillion, according to EMARKETER’s forecast. Retailers will need to lean into value messaging to resonate with cautious, but active consumers.
Brands must prepare for the unexpected
From natural disasters to potential uncertainty surrounding the election, retailers need to be ready to pivot quickly this season.
“As the hurricanes have put front of mind, anything can happen at any time, and so retailers need to move quickly,” Stambor said.
The upcoming presidential election could be particularly disruptive, potentially dragging on for weeks and distracting consumers from holiday shopping. During uncertain moments, brands must decide whether to take a clear stand or maintain neutrality—both approaches carry risks.
For marketers, this means authenticity is key when messaging during uncertain times. Brands need to stay true to their values and avoid alienating consumers.
“You don’t want to say something that can be construed in a way that could offend people,” Stambor said. “You’ve got to walk a careful line here.”
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