‘Tis the season: USC experts discuss key trends shaping the holiday economy
As the holiday season approaches, American consumers are eager to embrace traditions like Thanksgiving Day football games and Black Friday shopping sprees. However, rising inflation and supply chain disruptions cast a shadow of uncertainty over the festivities.
USC experts provide insights into the key trends that are likely to shape consumer behavior during the holiday season.
Thanksgiving Day football: A win-win for franchises and sponsors
“Thanksgiving Day football games are deeply woven into the fabric of American culture and tradition; it’s all about turkeys and touchdowns. We pride ourselves in competition and the heat of the battle. The local economic boost where games are held, especially during high-profile events like Thanksgiving, is undeniable,” said Lorena Martin, an expert in sports business and analytics at the USC Marshall School of Business.
“Based on data as well as context and a sprinkle of common sense, football this holiday season is going to be a win-win for retail, hospitality, sports and entertainment industries. The remarkable athletic prowess, coupled with the elegance of the game’s strategy and fierce competition, is an exhilarating spectacle for sports fans around the world.”
Are global supply chains ready for Black Friday?
“The upcoming holiday season is expected to face several significant supply chain challenges. One of the critical issues is the increased level of consumer credit card debt, which is expected to reach an all-time high of more than one trillion dollars in 2023. Many consumers might be less inclined or able to spend freely, potentially leading to more selective purchasing. This trend could significantly impact the overall volume of sales during Black Friday,” said Nick Vyas, a global supply chain expert at USC Marshall.
“Despite a potential decrease in consumer spending power, the demand during the holiday season — especially around Black Friday — remains high. This surge can quickly overwhelm supply chains unprepared or recovering from previous disruptions, leading to stock shortages and potential customer dissatisfaction.”
Sports franchises cash in on Thanksgiving Day festivities
“For franchises that traditionally play on Thanksgiving Day, these games offer tremendous annual value as a result of the brand exposure and big event status that these holiday games provide. National broadcasts are valuable currency for all NFL franchises as they provide an opportunity to expand their brand presence beyond their regional footprint and drive additional interest, and subsequently revenue, from that increased exposure,” said Courtney Brunious, an expert in strategy, sports business and leadership at USC Marshall.
“These special Thanksgiving holiday games are an opportunity to boost attendance and ticket sales regardless of the team’s performance and generate ancillary revenue surrounding the festivities associated with the day.”
Economists say that as demand goes up, prices should rise. Why, then, do we end up with elaborate sales and deals during the holidays?
“The need to buy a large number of gifts does not necessarily translate into an increased demand — a willingness among customers to pay higher prices for a particular item,” said Lars Perner, an expert in consumer behavior and price response at USC Marshall.
“There is a tremendous potential for substitution among many different gift possibilities. In some cases, one’s children might have asked for a specific toy, but in other cases, a smart phone cover, a book or a shirt may all be suitable gift ideas for a given individual. With this degree of substitutability, demand for any one item is actually lower,” he said.
“For off-holiday shopping, opportunities for substitution are much less. If you need a vacuum cleaner, a waffle iron simply isn’t a viable substitute.”