Holiday Shopping 2017: Local Versus Online

Dec 5, 2017

With that gift-giving time of year quickly approaching, the way people purchase presents is changing. Some prefer online shopping. But others will visit retailers close to home, including big box department stores and shopping malls.

What's YOUR Holiday Shopping strategy? 

According to a new statewide survey of consumers released Monday by the Siena College Research Institute, 61 percent of New Yorkers plan to spend about the same this year as last on holiday gifts while 28 percent plan to lessen their spending and 9 percent intend to spend more.  Siena College Research Institute Director Don Levy:   "What we see in indicator after indicator is that it looks as though holiday spending is going to be up just a little bit. Overwhelmingly new Yorkers are excited about the holidays, and while about 61 percent say that they plan to spend pretty much what they did last year, almost 10 percent say you know right now, I'm ready to spend a little bit more than I have in years past. And over a quarter of us right now say that our holiday spending budget is over $1,000. So it does look as though we're going to see the cash register ring this holiday season."

The spending range for New Yorkers sits between $500 and $1,000 this holiday season.

Some folks, particularly those who have forsaken cars and moved closer to their jobs as municipalities promote the "walkable city" concept, may not have a secure place where packages can be delivered: they'll likely be conducting shopping expeditions on foot.

Georgette Steffens is executive director of the Downtown Albany Business Improvement District.  "In downtown we have over 70 retail and retail-related places that people can shop. New this year is a Fort Orange Holiday Market. So it's an opportunity to support local and regional makers who have one-of-a-kind items that I think really hit people that are choosing to live downtown, those are the kinds of items that they want to purchase for themselves as well as just for gifts.""

The Fort Orange General Store at 412 Broadway created that market.    "...it starts at 4 p.m. and runs 'til 9 p.m. on Fridays in December. It is both in their store as well as at 488 Broadway, which is the Arcade Building here in downtown. They have music, they have over 20 vendors, Albany Center Gallery now has a gift shop you can purchase items there, and so, its' really an event in and of itself where you can find one-of-a-kind items, Albany-centric pieces, as well as you can meet the makers themselves and learn more about their products and the ideas behind the pieces that they've made."

Yet a huge majority number of people will be shopping online, according to Levy.    "Right now we're looking at 70 percent of New Yorkers planning to conduct at least some of their shopping online. And nearly 1 out of every 5 of us and over a quarter of young residents say that they're going to spend the majority of their spending online."

Online shopping has its pitfalls.

Senate Minority Leader Chuck Schumer is sounding the alarm that the same scalpers who snatch up all available tickets to Broadway shows and stadium concerts have migrated to in-demand holiday toys.  According to Consumer Reports, bots are now being used to buy and sell popular holiday gifts like toys, gaming equipment and high-end sneakers.   "Cyber bots, we call them ‘grinch bots,’ are expanding their reach and unfairly scooping up the hottest toys before parents can even click 'buy.'"

The bots scan social media to learn about sales before consumers.  Schumer’s office gave several examples, like the Super Nintendo entertainment system NES Classic Edition, which sells for $79.99:  out of stock online at BestBuy, Game Stop, and Target. But it was available on Amazon and eBay for as much as $13,000.

  • Fingerlings, which typically sell for $14.99, were out of stock online at Toys-r-us, Walmart, and Target. However, the item was available for sale on Amazon and eBay for as much as $1,000 each.  
  • L.O.L. Surprise! Doll, which sells for $9.99, was out of stock online at Toys-r-us, Target and Walmart. However, the item was available on Amazon and eBay for as much as $500.
  • Barbie Hello Dreamhouse, which sells for $300, was out of stock online at Toys-r-us. However, the item was available for sale on Amazon and eBay for as much as $1,500.

Schumer is asking two of the leading retail trade associations – the National Retail Federation and the Retail Industry Leaders Association – to investigate and help their members combat the sophisticated computer programs.

Schumer’s letter to the retail groups appears below.

Dear Mr. Rhodes and Mr. Shay:

I write today to express my serious concerns with the widespread use of bot technology on retail websites to deprive good-faith consumers of access to products in high demand.  As we approach this holiday season, it is particularly important that consumers have a fair access to popular products on the market.  As such, I am calling on your associations to immediately investigate how these dishonest software programs are being used on your members’ sites and take all available steps to thwart computer systems from cheating America’s consumers.

As the demand for toys like Hatchimals and Nintendo’s NES gaming consoles have increased, so too have the surreptitious techniques bad actors have adopted to more effectively capture the retail market and capitalize off of consumer demand to artificially inflate prices.  Specifically, hackers are now using software robots (“bots”) to purchase popular toys, gaming equipment, and even high-end collectible tennis shoes. Because of the sophistication of these automated tools, the hackers are able to learn about key retail sales, predict the product sales addresses, and purchase mass quantities of product as soon as the site goes live, before ordinary consumers even have a chance to begin a transaction.  The hackers then upsell the products on third party platforms. In some cases, bot operators are using more than 10,000 IP address and 500 credit cards in order to bypass retailer purchase limits. I am deeply concerned that the prevalence of these deceptive techniques creates an unfair environment for consumers who are unable to compete with the lightning speeds of computer robots. 

As America’s most prominent and successful retail sales operations, your members are uniquely positioned to track this deceptive behavior and institute safeguards that could reign in their rampant use. Increased protections to prevent this type of behavior can create the type of consumer trust and confidence needed to ensure consumers are getting a fair deal for the types of products they buy on the market. Without a way to level the playing field, consumers will be left to compete with the robots or succumb to the outrageously high prices of third party sellers. No family should have to experience this, especially during the Christmas season.

I therefore ask you to share with my staff all of the steps your members are currently taking to confront this behavior, and how they plan to prevent bots from infiltrating their payment platforms in the future. Furthermore, I urge you to establish and put in place industry-wide best practice standards to ensure consumers are fully protected from sophisticated computer programs.

I know you share my commitment to protecting consumers, who are your customers and my constituents.  I thank you for your time and look forward to working with you to strengthen consumer protections.

Sincerely,

U.S. Senator Charles E. Schumer

###