Susan Tompor, Detroit Free Press
Published 8:19 a.m. ET Nov. 25, 2020
The country is polarized about so many things — the election, the right way to tackle the virus, who you should or shouldn’t sit next to at Thanksgiving. So why shouldn’t 2020 holiday gift giving join the ever-growing list of potentially hot button topics?
On the one side, you can run into girlfriends or cousins who want to ditch holiday shopping. “Let’s just share good wishes, not gifts,” they’ll say. Makes sense. After all, many consumers suffered job losses, pay cuts or furloughs, shuttered businesses, the loss of loved ones to the coronavirus, and seemingly never-ending anxiety in 2020.
Then again, what’s the harm in sending someone a special box of gourmet cookies or coffees out of the blue? Or maybe even splurging by spending $500 or more on a Sony PlayStation 5? Kind of makes sense, too. We could all use a pick-me-up.
What about all those loved ones you just won’t be able to visit? Isn’t buying a lavish gift a way to make up for the fact that everyone, including your kids, just lived through one miserable year?
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Guilt wrapped in a bow
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“Guilt gifting” is parked next to online shopping and curbside pickup when it comes to hot holiday trends. About 40% of consumers say they’re going to buy more gifts in 2020 to bring joy during challenging times, according to research by the NPD Group.
“I definitely feel like everybody is down this year and it’s a way to cheer people up. I do want to bring cheer to people I won’t be able to see for a while,” said Jennifer Adlhoch, 45.
Jennifer Adlhoch, and her sons, Samuel, 14, and Andrew, 10, pose for a portrait in their home on Nov. 17, 2020, in Grosse Pointe. (Photo: Antranik Tavitian, Detroit Free Press)
The Grosse Pointe, Michigan, real estate agent has had a phenomenal year selling homes, thanks to “insanely low” interest rates and people reevaluating what they need in a home during stay-in-place guidelines.
Many home buyers this year traded up for a house with office space after jobs went remote and took up shop in their basements or living rooms. Even homes with a pool became a hot commodity, Adlhoch said, when they’re normally a tougher sell because some weren’t sure whether or when community pools would open.
Adlhoch, who has yet to do most of her holiday shopping, expects to spend more on out of town family and add people to her gift list, not cross them off. Her mother in Florida might get something special like a food subscription service, luxurious lounge wear or an extra special surprise because the family can’t travel to visit during the pandemic.
Her sons — Sam, 14, and Andrew, 10 — deserve something special, too, because they’re not able to see their friends. One splurge includes taking the boys Up North for skiing during the holidays.
“There’s a lot of guilt with the kids being home,” she said. “You want to see them happy on Christmas Day because they’ve been locked in the house so long.”
Some set to spend more on gifts
As stressful as the spikes in COVID-19 cases and jobless numbers have been in Michigan and elsewhere, many people are not in bad financial shape this year.
The ability to work remotely protected many pocketbooks during the pandemic. Even some small area retailers benefited from being able to sell their clothing, jewelry and other items online.
We’ve seen vaccine-fueled rallies on Wall Street in November, driving the Dow Jones Industrial Average to a record close of 29,669.22 points on Nov. 16. The Dow was up nearly 4% from the end of 2019 through the mid-November record close.
The Dow traded above the 30,000 mark Tuesday for the first time ever, fueled by talk of progress relating to the development of vaccines.
Consumers didn’t seem to be rushing to spend in October, however. U.S. retail sales grew by a mere 0.3%, well below expectations and worse than September’s surge of 1.6%, according to a Nov. 17 report by the Commerce Department. Some fear that the outlook is growing darker, as COVID-19 cases spike in many areas.
Others in the retail industry — who frankly often are optimistic about holiday sales — believe many consumers will be spending plenty on gifts.
“They want to feel holiday. They want to feel Christmas,” Nathan Forbes, managing partner of The Forbes Company told the Detroit Free Press on Nov. 19.
The Southfield, Michigan-based company is a developer, owner and manager of luxury shopping destinations throughout Florida and Michigan, including the Somerset Collection in Troy.
“When we were all cooped up during the pandemic, we were all shopping for needs,” Forbes said. “We were shopping for necessities.”
“Now, people are really looking at shopping for wants.”
Coming into the holiday season, he said, there’s a keen interest in splurging on yourself or family members and finding joy in buying the perfect gift. We’re thinking more about adding a little indulgence to the mix.
The outlook relating to the spread of the virus remains a concern. But overall, Forbes sees consumers finding ways to shop safely and comfortably, including taking advantage of curbside services that will be offered for all stores at the Somerset Collection this holiday season.
Consumers, of course, are hearing mixed messages relating to progress on the COVID-19 front.
On the one hand, many states, including Michigan, are enacting some tighter restrictions to limit the outbreak of coronavirus cases. On the other hand, we are hearing about vaccine-related progress at companies, such as Pfizer, Moderna and Johnson & Johnson, which could help significantly in 2021.
“Now, for the first time, there’s a vaccine on the horizon,” Forbes said. “People are feeling a little bit better.”
What’s interesting is many consumers are taking polar opposite approaches to holiday shopping. Many don’t plan to spend the same way they did last year, according to industry research.
About 35% of consumers say they will spend less for the 2020 holiday season because of COVID-19, according to research by the NPD Group market research firm.
But 3 in 10 holiday shoppers are planning to load up the cart and spend more than last year because they have fewer expenses related to activities like dining out and travel, according to the group’s annual holiday study.
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Grandma might not be able to travel across country because of safety precautions associated with the virus but she wants to look like the best Santa of all on the next Zoom call so she plans to buy the very best gifts, Marshal Cohen, NPD Group’s chief industry adviser for retail, said in a webinar presentation.
And many consumers are likely to buy gifts for themselves as a reward for coping through a challenging year.
Mindy Ulrich, 44, of Grosse Pointe plans to buy bigger ticket items for her two sons Nasen, 14, and Keaton, 12, including new computers for each of them and the popular but elusive Sony PlayStation 5.
Mindy Ulrich poses for a portrait on her front porch on Nov. 17, 2020, in Grosse Pointe. Ulrich decorated her porch for Christmas and is looking to buy her son a new PlayStation. (Photo: Antranik Tavitian, Detroit Free Press)
“We can’t find it but we’re searching,” Ulrich says of the PlayStation.
She and her husband, an engineer at General Motors who is working from home during the pandemic, feel somewhat like they’re enabling their sons to be hermits and stay home. But right now, what else could they do anyway?
“Our kids have missed out on so much this year that we want to make up for it,” Ulrich said.
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Many people who have extra discretionary income haven’t been able to splurge this year by taking a big family vacation to Disney World, heading to the casino or even treating themselves to some nice dinners out each month. Some do have extra cash on the sidelines to give a little extra to treasured friends and loved ones, as well as charities.
“I have been thinking a lot about splurging on my mom this year. She’s been holed up in Texas with very little social interaction and it is weighing on my heart being so far from her,” said Melissa Joy, president of Pearl Planning, a wealth adviser in Dexter, Michigan.
Joy said she’s considering coordinating and paying for a yet-to-be-determined home improvement project for her mother. In the past, she has bought airline tickets so her mother could travel to see the family here.
This year, she says, she’d be happy to double or triple her gift spending to give her mother a little more comfort at home.
Joy said she wants to get her shopping done before Thanksgiving to allow her family to focus more on peaceful traditions and virtually connecting during the holidays.
She also plans to bump up her charitable giving to try to help charities, social service organizations and arts groups that face financial challenges during the pandemic.
To be sure, not everyone can give more this holiday.
Many consumers could be spending less than last year, the NPD research showed. Consumers plan to spend on average $691 on holiday shopping in 2020 — down from an average $740 last year. But the forecast is in line with an average $693 two years ago.
Items for the home, toys, clothing and electronics are likely to continue to be popular gifts.
Some hot 2020 categories didn’t exist last year: 31% of holiday shoppers plan to fill holiday stockings with masks used to fight the spread of the coronavirus.
Some consumers clearly dread the idea of shopping now, especially as states, including Michigan, put new COVID-19 restrictions in place. Michigan Gov. Gretchen Whitmer’s new plan will allow retail stores and hair salons to remain open.
But the three-week clampdown, imposed through a Michigan Department of Health and Human Services order, prohibits indoor dining at restaurants and limits indoor residential gatherings to two households at one time. That order went effect Nov. 18 and runs through Dec. 8.
Michigan’s three-week mini-shutdown also temporarily closes bowling alleys, movie theaters and casinos.
Stores remain open for holiday shopping
Do you shop when you can’t do much else?
Fewer holiday parties and gatherings give many people a reason to fill that void by shopping, according to Terrence Daryl Shulman, founder and director of The Shulman Center for Compulsive Theft, Spending and Hoarding in Franklin.
Some may shop more online, as well as in stores, to make up for missing seeing their friends and family. And, given all the stress of 2020, what many jokingly call retail therapy could edge upward.
“The ongoing relative uncertainty about the elections, the economy, the weather, COVID, potential protesting, etc., will contribute to more stress and more shopping than normal, even for those who can least afford it,” Shulman said.
How much extra cash you have on the sidelines — or how far away you are from hitting the limit on your credit card — should not fuel how much you decide to splurge on gifts.
In general, Shulman said, shoppers still need to work within a budget and slow down to make sure that their spending this holiday isn’t being driven by their emotions.
“Nobody needs more financial, emotional or physical stress right now,” Shulman said.