5 Ways the Pandemic Is Changing Shopping This Holiday Season

Winter shopping.
Eva-Katalin / Getty Images

The holiday season is creating financial stress for nearly 48% of middle-class Americans this year, according to a survey from online financial services provider One. Among middle-class consumers’ biggest concerns are inflation (76.47%) and supply chain shortages (62.87%). Meanwhile, only 22.18% are “very concerned” about catching COVID, while 47.06% are “somewhat” concerned. Credit card fraud is also on their radar, with 19.58% “highly concerned” and 46.67% “mildly concerned.”

See: Why You Might Want to Hire Someone Else to Do All of Your Holiday Shopping — And What It Costs
Find: Should You Refinance Now With the Low Mortgage Rates?

These factors, among other concerns and mindset shifts, are changing the way holiday shopping looks for many people, for better or worse. “I think people are fatigued. They want to be safe from a health and financial perspective, but they also want life to get back to normal. I think it does create a couple of blind spots where it may have an impact most shoppers may not be expecting,” said One CEO Brian Hamilton.

What are these blind spots, and how can Americans be better prepared this holiday season? And what are some of the surprising positive lessons the struggles of the past two years have taught us?

Make Your Money Work for You

Americans Are Shopping Earlier

Concerns about supply chain issues, product shortages and rising prices are leading Americans to shop earlier. The One survey showed that the largest group (32.79%) had already started their shopping in early October. Another 4.73% said they planned to start by Oct. 15, while 15.24% intended to begin before the end of October. Nineteen percent said they planned to start in early November, which is still before the “official” start of the holiday shopping season, which traditionally kicks off on Black Friday.

See: Your Guide to Getting Ahead on Holiday Shopping in November
Find: Don’t Let Inflation Bust Your Holiday Shopping Budget

The early start could be driven by concerns about supply chain shortages as well as rising prices as the season progresses. “Supply chain issues are going to impact not just availability, but prices,” Hamilton said. “If there is a constrained supply and ongoing demand, as we expect during the holiday season, you would expect it to affect prices.”

Inflation Is Happening — But Many Shoppers Aren’t Noticing Yet

Although more than three-quarters of holiday shoppers say they are concerned about inflation, only 54.11% say they are already seeing inflated costs. “I’m surprised the number wasn’t higher,” Hamilton said.

Make Your Money Work for You

He noted that many of the items rising in price — including gas and groceries — aren’t included in traditional metrics like the Consumer Price Index. “I think Americans may start seeing that stuff is more expensive relative to what they can afford, and also more expensive on an objective basis,” Hamilton said. “Household income may have been impacted by COVID, so families might be making less, while the goods themselves might be more expensive. There’s a combined effect on the relative cost of things this holiday season. The constrained supply chain makes things harder to get, but it also makes available items more expensive.”

See: Nearly Half of Middle-Class Families Can’t Afford All the Holiday Gifts They Want to Give This Year
Find: The Best Holiday Shopping Strategies for Your Wallet

People Continue Shopping Online — But It May Not Be Due to COVID

Although e-commerce is generally on the rise, survey respondents said that 63% of their shopping will be in person versus online. Those who said that more than 51% will be online cited “convenience” over concerns about COVID-19 as the reason.

While 12.3% said “concerns about COVID” keep them shopping from home, nearly 54% said it’s simply more convenient. Another 15.77% cited a greater product selection online, while 10.40% said they found better prices online.

“I think people were already trending toward preferring to shop online,” Hamilton said. However, supply chain issues could be steering people toward shopping malls and brick-and-mortar retailers, where shipping delays are not a concern. “People are shopping wherever they need to,” Hamilton observed. “They’ll go to the mall or they’ll go to whatever website they need to find what they want because the supply chain issues are tough right now.”

See: Top 7 Websites to Buy Holiday Gifts — Including Some You Didn’t Know Existed
Find: The Best Type of Store to Shop for Holiday Gifts by Age Bracket

Credit Card Theft and Fraud Continue to Rise

The tendency to shop at what Hamilton calls “secondary” websites to find gifts could increase the risk of fraud this holiday season. “I think most people aren’t paying [enough] attention to [fraud],” Hamilton said. “Identity theft and fraud is up — and that’s not specific to the holiday season. There’s so much data out there now, that identity theft and fraud continues to rise as hackers get more sophisticated in their methods.”

Hamilton explained that supply chain issues of the season could drive people to less-than-reputable websites to find the items they need, which could further increase instances of fraud. To protect yourself online, especially if you have to venture off the beaten path to find the gifts you want, consider using a virtual credit card number for purchases.

“People are going to sites that are a little farther afield, and those are the sites where fraud and security are more of a concern,” Hamilton said. “The ability to shop with a dedicated virtual card on e-commerce sites allows you to deactivate that virtual card if there’s a data breach. You don’t have to shut down your primary card, which may also be the one you use to pay all your bills.”

See: How to Do Your Full Holiday Budget Now
Find: How Much Your Holiday Spending Could Cost You If You Don’t Pay Right Away

More People Are Using Cash and Debit Than in Past Years

There is one bright spot to this year’s holiday shopping season that the survey uncovered. Cash and debit card usage are up compared to prior years, Hamilton pointed out. Although 56% of holiday shoppers this year said they plan to put the bulk of their purchases on credit cards, 44% will be using cash or a debit card for most of their holiday shopping.

“I think there’s a preference for debit because people don’t want to carry a balance of debt after the holidays and pay interest on it for months,” Hamilton said. “People got into a savings mindset during the pandemic, and that’s still very much part of the collective psyche. Saving came into vogue, and not paying interest on debt is a form of savings.”

With the holiday season not yet in full swing, these mindsets, fears and stressors could change — for better or worse. Hedging against inflation and supply chain issues by shopping early, and protecting yourself from hackers online with virtual credit cards and by keeping an eye on your accounts for unusual activity, could help to keep this holiday season merry and bright.

More From GOBankingRates

About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.