The National Retail Federation says it expects holiday retail sales will grow 6%–8% over last year’s “record” holiday season, but the organization also says that consumers will spend cautiously amid a high-inflation and high interest–rate environment.

The NRF announced its sales estimate for the period between Nov. 1 and Dec. 31 on Nov. 3, noting that retail sales overall in the past two years since the height of the coronavirus pandemic and related shutdowns have been “steady,” especially among middle- to high-income shoppers.

However, lower-income households are feeling cash-strapped because of the rising inflation rates, and all consumers generally are feeling like they need to prioritize their spending, especially around the holiday season, says Matthew Shay, the NRF’s president and CEO, in a conference call with the media about its holiday forecast.

“In the face of [a challenging economic environment], and in the face of uncertainty across the economy, consumers are behaving more cautiously,” Shay says. “Consumers are looking for discounts. They’re looking for deals. They’re looking for value to stretch their dollars.”

Within the jewelry industry, brands including Diamond Nexus say they are hosting shopping events, marketing special deals and sales, as well as creating targeted communications with shoppers individually and across channels to gain consumer attention.

“We are in a place where people are reprioritizing their spend; we’ve seen it all year,” says Brittany Bozmoski, chief marketing officer of Diamond Nexus, which started its Black Friday sale on Oct. 31.

Diamond Nexus is offering up to 50% off sitewide, including select engagement rings, wedding bands, and fine jewelry in that Black Friday event, Bozmoski says. They created curated shopping pages, including the Holiday Shop, to help customers get to their product and price point with ease.

They also are focusing on personalizing their experience and increasing their one-to-one communication with its text and email subscribers. By offering individualized offers and special deals to the consumer, Bozmoski says Diamond Nexus is creating a more engaging and meaningful connection to the brand.

“We know [buying fine jewelry] is a big decision and that budget is top of mind. Our aim is to make it easy to access high quality fine jewelry without the high price tags,” Bozmoski says.

In its surveys, the NRF found consumers plan to spend an average of $832.84 on gifts and holiday items such as decorations and food, which is in line with the average for the last 10 years.

Last year’s holiday sales increased 13.5% over 2020, the NRF reported, and holiday retail sales have averaged growth of 4.9% over the past 10 years. The NRF also expects online and other non-store sales to increase between 10% and 12% during this holiday season.

One thing remains true this year that has been trending for a while now: Consumers are shopping earlier for the holidays, something retailers have noticed and are marketing to with earlier and earlier holiday-related sales and promotions. This shift away from a traditional Black Friday or day after Thanksgiving holiday kickoff comes as shoppers are looking to spread out their holiday spending and find the best value to boost their purchasing power, Shay says.

“Our research over the past several years shows that consumers start browsing and exploring and purchasing well before November,” Shay says. “We’re confident that despite the early start, we’ll see healthy consumer engagement though the rest of this year. Retailers have planned opportunities in discounts and promotions to drive consumer engagement.”

Hiring will continue to challenge retailers, but the overall labor market is strong, and rising wages have helped some middle- to higher-income consumers feel like they have the income to offset the rising interest rates and home prices, says Jack Kleinhenz, the NRF’s chief economist.

“I do believe the job market is pivotal,” Kleinhenz says. “Workers are able in a very short period to find a job, so there’s no real indication now that we’re seeing any layoffs picking up. We expect job gains to offset any significant pullback in spending.”

Top: Diamond Nexus started its Black Friday sale on Oct. 31, knowing that consumers want time to browse and stretch their dollars this holiday sales season, which is marketed with higher interest rates and inflation (photo courtesy of Diamond Nexus). 

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