With two big shopping days on the horizon – Black Friday and Cyber Monday – U.S. retailers are getting ready for the most important time of the year. The stakes are high: For some companies, the holiday shopping season accounts for 50% of annual revenue. But economic uncertainty and recent inflation could put a damper on customers’ holiday spending, our new research suggests.

As marketing professors, we know that consumer spending drives the U.S. economy. So for the second year in a row, we surveyed more than 500 Americans about their holiday shopping plans. We found that consumers are conflicted: They’re excited for deals and looking forward to treating themselves, but they’re feeling squeezed by high prices.

Consumers are starting the season cautiously optimistic …

When it comes to Black Friday and Cyber Monday, two-thirds of respondents say they think deals will be as good as or better than they were last year — up from 56% in 2022. That’s in line with the predictions of market research firm Adobe Analytics, which expects record discounts this year.

Shoppers also plan to splurge a little on Black Friday and Cyber Monday. The share who plan to prioritize shopping for necessities fell slightly from 2022, while those who plan to buy luxury items rose modestly. Meanwhile, plans to spend on big-ticket items stayed stable at 15%.

Despite a minor shift to more expensive items, these findings are concerning for retailers. That’s because big-ticket items have historically been one of the top three categories for consumers spending money on Black Friday and Cyber Monday, and 15% is on the low side.

Like in 2022, the majority of consumers we surveyed — 68.2% — plan to shop mostly online. Fewer than 11% of the respondents in our survey said they plan to shop in-store this Black Friday, so malls may suffer from lower foot traffic.

… but they’re still acting like there’s a recession

Last year, despite the brightening economic outlook, we found that customers were pinching pennies and otherwise behaving in ways most commonly seen in times of economic crisis. This year, inflation-fatigued consumers plan to do much the same.

High prices and inflation are still consumers’ main concerns, with roughly 90% of our respondents saying that those issues will affect their holiday shopping. On average, they plan to spend about US$665 on gifts this holiday season — about $35 less than last year, and substantially less than the National Retail Federation’s 10-year average of $826.

On a more optimistic note, the number of people who said they intend to spend “slightly less” or “much less” than last year fell to 24.2% this year — a 10-percentage-point drop from 2022. While nearly 39% of respondents said they will spend “about the same” amount, in nominal terms this means that they will be spending less accounting for inflation.

Meanwhile, shoppers seem to be budget-planning more than ever. Customers told us they plan to use a variety of strategies to control their purchases, such as strict shopping lists and starting shopping earlier to spread their spending out.

However, we found a silver lining for retailers: While consumers are planning to spend less this year, they expressed more interest in brand names and expensive gifts, which tend to have higher profit margins.

One notable change from 2022 is that more customers think retailers will offer “great value.” This indicates that while consumers are looking for the best prices and affordable options, they aren’t necessarily looking for cheap products.

In times of economic uncertainty, consumers want to stay in control of their spending. So it’s not surprising that almost 50% of our respondents said they would be doing their holiday spending using funds they’d saved for that purpose. A similar proportion said they plan to use credit cards.

However, the use of buy-now, pay-later options is stagnating at about 15%, even though many big retailers have adopted them. This suggests that even though these options are more readily available to consumers, budget-conscious shoppers may be avoiding them.

The bigger picture

Our research adds to an overall mixed picture about this year’s holiday retail season. Trade groups and economic analysts have made conflicting predictions, with some forecasting a return to pre-pandemic holiday spending and others expecting shoppers to exercise caution.

Retailers are also split on their holiday forecasts. Amazon appears bullish, having significantly boosted its seasonal hiring, while FedEx and Target have been more downbeat.

That makes sense, given the broader economic context. Although the U.S. unemployment rate is relatively low at 3.9%, more than half of our survey respondents said they were worried about their job security, with about one-third saying they were “moderately” or “severely” worried. Only 13% said they had no financial concerns at all.

As the U.S. economy is still experiencing uncertainty, consumers are continuing to adopt recession-related shopping behaviors this holiday season. That means retailers would be wise to focus on providing true value.

Ayalla A. Ruvio, Associate Professor of Marketing and the Director of the MS of Marketing Research program, Michigan State University and Forrest Morgeson, Associate Professor of Marketing, Michigan State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Astronomers have known for decades that the universe is expanding. When they use telescopes to observe faraway galaxies, they see that these galaxies are moving away from Earth.

To astronomers, the wavelength of light a galaxy emits is longer the faster the galaxy is moving away from us. The farther away the galaxy is, the more its light has shifted toward the longer wavelengths on the red side of the spectrum – so the higher the “redshift.”

Because the speed of light is finite, fast, but not infinitely fast, seeing something far away means we’re looking at the thing how it looked in the past. With distant, high-redshift galaxies, we’re seeing the galaxy when the universe was in a younger state. So “high redshift” corresponds to the early times in the universe, and “low redshift” corresponds to the late times in the universe.

But as astronomers have studied these distances, they’ve learned that the universe is not just expanding – its rate of expansion is accelerating. And that expansion rate is even faster than the leading theory predicts it should be, leaving cosmologists like me puzzled and looking for new explanations.

Dark energy and a cosmological constant

Scientists call the source of this acceleration dark energy. We’re not quite sure what drives dark energy or how it works, but we think its behavior could be explained by a cosmological constant, which is a property of spacetime that contributes to the expansion of the universe.

Albert Einstein originally came up with this constant – he marked it with a lambda in his theory of general relativity. With a cosmological constant, as the universe expands, the energy density of the cosmological constant stays the same.

Imagine a box full of particles. If the volume of the box increases, the density of particles would decrease as they spread out to take up all the space in the box. Now imagine the same box, but as the volume increases, the density of the particles stays the same.

It doesn’t seem intuitive, right? That the energy density of the cosmological constant does not decrease as the universe expands is, of course, very weird, but this property helps explain the accelerating universe.

A standard model of cosmology

Right now, the leading theory, or standard model, of cosmology is called “Lambda CDM.” Lambda denotes the cosmological constant describing dark energy, and CDM stands for cold dark matter. This model describes both the acceleration of the universe in its late stages as well as the expansion rate in its early days.

Specifically, the Lambda CDM explains observations of the cosmic microwave background, which is the afterglow of microwave radiation from when the universe was in a “hot, dense state” about 300,000 years after the Big Bang. Observations using the Planck satellite, which measures the cosmic microwave background, led scientists to create the Lambda CDM model.

Fitting the Lambda CDM model to the cosmic microwave background allows physicists to predict the value of the Hubble constant, which isn’t actually a constant but a measurement describing the universe’s current expansion rate.

But the Lambda CDM model isn’t perfect. The expansion rate scientists have calculated by measuring distances to galaxies, and the expansion rate as described in Lambda CDM using observations of the cosmic microwave background, don’t line up. Astrophysicists call that disagreement the Hubble tension.

The Hubble tension

Over the past few years, I’ve been researching ways to explain this Hubble tension. The tension may be indicating that the Lambda CDM model is incomplete and physicists should modify their model, or it could indicate that it’s time for researchers to come up with new ideas about how the universe works. And new ideas are always the most exciting things for a physicist.

One way to explain the Hubble tension is to modify the Lambda CDM model by changing the expansion rate at low redshift, at late times in the universe. Modifying the model like this can help physicists predict what sort of physical phenomena might be causing the Hubble tension.

For instance, maybe dark energy is not a cosmological constant but instead the result of gravity working in new ways. If this is the case, dark energy would evolve as the universe expands – and the cosmic microwave background, which shows what the universe looked like only a few years after its creation, would have a different prediction for the Hubble constant.

But, my team’s latest research has found that physicists can’t explain the Hubble tension just by changing the expansion rate in the late universe – this whole class of solutions falls short.

Developing new models

To study what types of solutions could explain the Hubble tension, we developed statistical tools that enabled us to test the viability of the entire class of models that change the expansion rate in the late universe. These statistical tools are very flexible, and we used them to match or mimic different models that could potentially fit observations of the universe’s expansion rate and might offer a solution to the Hubble tension.

The models we tested include evolving dark energy models, where dark energy acts differently at different times in the universe. We also tested interacting dark energy-dark matter models, where dark energy interacts with dark matter, and modified gravity models, where gravity acts differently at different times in the universe.

But none of these could fully explain the Hubble tension. These results suggest that physicists should study the early universe to understand the source of the tension.

Ryan Keeley, Postdoctoral Scholar in Physics, University of California, Merced

This article is republished from The Conversation under a Creative Commons license. Read the original article.