As we move closer to Black Friday, Cyber Monday and the traditional peak holiday shopping season, where consumers plan to complete their holiday shopping has been a topic of discussion from retailers to analysts.
As noted by the National Retail Federation, holiday sales this year are anticipated to grow between 8.5% and 10.5% from last year’s records. Retailers and consumer goods companies looking to capitalize on additional discretionary spending are closely monitoring whether shopping behaviors shift from last year, which saw many consumers turn to online and omnichannel options.
With COVID-19 hospitalization rates declining and vaccinations increasing, consumers are growing more comfortable with in-person activities. Coresight Research noted that 65.1% of shoppers anticipate making in-store holiday purchases this year, an increase of 11.4% from last year; while 78.2% of shoppers will shop online, a decline from 84.4%.
Deals drive an early shopping season
To capitalize on anticipated record holiday spending and combat potential lower inventory levels later in the season, retailers have begun offering price-match guarantees earlier this holiday season than in previous years. For example, Target began its price-match guarantee in early October, compared with November in previous years. Further, retailers have begun offering Black Friday deals throughout November, rather than the traditional day after Thanksgiving promotion. We anticipate these moves will drive in-person retail holiday sales earlier in the season as consumers look to take advantage of retail offerings and stretch holiday budgets further.
Experiences are on consumer wish lists
In addition to where consumers will shop, what consumers will purchase is of interest. Throughout the pandemic consumers have amassed record savings, driven by wage rate growth, the enhanced child tax credit and other pandemic assistance. We anticipate that consumers will use these savings over the coming months on both products and experiences—like travel, concerts, vacations, sporting events and more—especially as supply chain challenges potentially impact product inventory levels later in the holiday season. Look for consumers to especially take opportunities to travel with families this holiday season after COVID-19 forced families to scale back traditional holiday plans last year.
While some shopping habits from last year will continue, consumers eager to leave the house and spend savings accumulated over the pandemic will turn to in-person shopping, as well as experiences, at levels not experienced last year.
Look for additional insights next week as we conclude our five-part consumer products holiday season countdown series.