The spread of the Omicron variant in the United States could shift consumer spending away from travel experiences and entertainment toward apparel, toys and electronics, according to National Retail Federation CEO Matt Shay.
“We know, unfortunately, that when the variants have had a real impact on the economy, the goods side of the economy has actually benefited from that because people change behavior away from the experience side of the economy and spend more time and more dollars engaged in the goods side of the economy,” Shay said on a call with reporters.
This shift could even impact 2021 holiday sales, which are projected to grow by 8.5 percent to 10.5 percent, which translates to sales between $843.3 billion and $859 billion — an all-time high.
While the spread of the Omicron variant could result in fresh lockdowns and new restrictions, U.S. consumers are so far enthusiastic about engaging in experiences. Experience-based gifts, ranging from travel vouchers to spa days and restaurant gift cards, are resonating with consumers as consumers feel comfortable with engaging in physical environments.
Nearly 43 percent of U.S. consumers said they are planning to buy service and experience-based gifts, according to an Accenture survey of 1,500 consumers. This is especially true for younger consumers, with at least 50 percent of Gen Z and millennial consumers planning to spend their dollars on experiences, CNBC reported.
Overall, Shay has a rosy outlook for the 2021 holiday season, with consumers exhibiting a strong willingness to spend even as the threat of the Omicron variant looms on the U.S. economy.
“We think there’s a reason to be aware, a reason to follow the kinds of protocols we have been following all along about safe practices and getting vaccinated, but there’s not a reason to panic,” he said.