How Has Amazon Affected the Holidays?

By Amelia Spring

For many, the idea of holiday shopping evokes familiar images: stores adorned with various holiday decorations, children perched atop Santa’s lap in a mall, and hoards of people crowding stores to buy discounted gifts. However, with the rise of online retailers like Amazon, the experience of in-store holiday shopping is losing its popularity.

“The Amazon Effect” is a term that refers to the rapid growth of e-commerce over recent years. The most prominent business in e-commerce is Amazon, with almost half of all online retail sales. Companies like Amazon offer fast, convenient service and allow consumers to compare the pricing of similar products side by side, making it harder for brick and mortar stores to compete.

This development is increasingly evident during the holiday shopping season, a time that has been usually marked by shoppers flooding malls and stores to buy gifts. Is it possible for online shopping to render in-store holiday shopping obsolete?

E-commerce has grown steadily over the last decade, and experts predict that e-commerce will grow by another 15% during this holiday season. An increasing number of people are spending money online instead of in stores for the holidays. For example, in 2017, about 51% of the average holiday budget was spent online. As more and more shoppers rely on e-commerce for holiday shopping, brick-and-mortar stores inevitably lose some business to companies like Amazon.

However, this does not mean that shoppers have abandoned brick-and-mortar stores entirely, since 49% of shoppers said they still prefer to see an item in person before buying it.  It seems unlikely that the in-store holiday shopping experience will be completely lost in the next few years. Consumers still value visiting stores because it allows them to interact with and try out products.

However, brick-and-mortar stores may face additional challenges in the distant future since people in younger generations spend more of their holiday budgets online. While shopping online may be easier and cheaper than going to a store, it may risk damaging the time-honored tradition of shopping for gifts in stores.

The question for many retailers is will shoppers continue to value the experiences many associate with in-person shopping, instead of blindly exchanging a trip to a mall for a few clicks of a mouse?  Time will tell.

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