By Stephen DeAngelis
It’s not your imagination if you think holiday shopping starts earlier every year. In the past, holiday shopping season traditionally began on Black Friday, the day after Thanksgiving. In recent years, holiday shopping has creeped earlier in the year. Journalist Ben Kesslen reports a new survey from Bankrate found, “48% of Americans will begin their winter holiday gift buying in October.”[1] The survey found that some shoppers begin even earlier. “Twelve percent of those surveyed said they started shopping in August, and 13% said they will begin in September. Most shoppers say they aren’t last minute, with only 15% planning to start buying gifts in December.” For years, people blamed retailers for extending the holiday shopping season into October. After all, it has not been unusual to see holiday store displays and sales shortly after Halloween. The Bankrate survey, however, strengthens the argument that consumers may now be the driving force behind early holiday shopping. Journalist Helen Atkinson posits that retailers and consumers both play a role in extending the holiday shopping season. She explains, “It could be a coincidence, but industry experts say consumers are opting for cheaper, slower shipping options just as retailers stock up early for peak season. It seems both sides of the equation may be looking not only to cut costs, but make sure they will have what they want in time. … It’s hard to tell yet exactly what’s moving the needle, but it is unquestionably moving, for now, at least.”[2]
Kesslen points out another trend that will impact this year’s holiday sales — bargain hunting. He writes, “Among those surveyed, 34% said inflation is changing how they shop.” In fact, bargain hunting is the most likely reason consumers begin holiday shopping early. Pawan Joshi, Senior Vice President of products & strategy at e2open, told Atkinson, “[Consumers are] more price sensitive.” He believes one reason consumers are shopping early is to avoid extra shipping costs (i.e., “If I don’t need it overnight, I’m not going to pay extra for that”).
2024 Holiday Shopping Predictions
Although early holiday shopping may be a good sign for the retail sector, bargain hunting shoppers lessen the optimism for a great holiday shopping season. Kesslen reports, “Shoppers are as price-conscious as ever, with just 24% telling Bankrate that they will likely spend more this year than last year. One-third said they plan to actually spend less this year. When you break the results down by age, more younger shoppers said they plan to spend more this year than last. Two in five Gen Zers expect to spend more, compared to 31% of millennials. Those numbers are much lower than the 19% of Gen Xers and 15% of baby boomers who plan to spend more.” Expert predictions about the holiday shopping season are also a mixed bag.
• Bain & Company. Bain analysts forecast 3.0% total growth with 0.5% in-store growth and 9.5% non-store growth.[3] They indicate this “subaverage growth” is a result of “Americans are putting a freeze on their overall outlook and spending” across all income levels.
• Salsify. “According to Salsify’s ‘2024 Holiday Consumer Research’ report, 65% of shoppers plan to spend ‘about the same’ as they did in 2023. Just 21% plan to spend less and 15% will likely spend more.”[4]
• Coveo. “In collaboration with Arlington Research, [Coveo] surveyed 4,000 U.S. and U.K. consumers in July to gauge how shoppers are feeling about the upcoming season. While there’s plenty of holiday cheer to go around, there are also a few ‘Grinch-y’ moments that retailers should take note of. … 59% of shoppers say they plan to cut back on everyday purchases just to expand their gifting budgets. People are tightening their belts on non-essentials in order to splash out when it matters most — on gifts for loved ones. And here’s another festive treat: more than three-quarters of shoppers (76%) are either maintaining or increasing their holiday gift spending this year.”[5]
• Deloitte. “An early holiday shopping report is forecasting a moderate increase in retail sales, as consumers continue to deal with inflation. In the first Deloitte 2024 Holiday Forecast, Deloitte, an audit, consulting, tax and advisory services firm, said holiday retail sales are likely to increase between 2.3% and 3.3% this year.”[6]
• Vericast. “Vericast’s latest research indicates consumers are facing an internal conflict between the desire to save money and the temptation to splurge during the 2024 winter holiday season. According to recent data of 1,000 U.S. adults and Vericast’s 2024 Holiday Retail TrendWatch, 41% of consumers are planning to splurge on gifts for themselves this holiday season, despite tightening spending elsewhere. This trend is even more pronounced among Gen Z (47%) and Millennials (56%). However, 46% of consumers say they need to budget more and spend less overall on holiday gifts this year. The conflicted mentality on spending is even more apparent when it comes to planning holiday parties and events, with hosts having mixed feelings of spending more to make the event special (56%) and looking for ways to save as much money as possible (66%).”[7]
• eMarketer. “According to predictions by eMarketer, US holiday retail ecommerce sales will break records this year, reaching $271.58 billion — a 9.5% increase from 2023 — which means ecommerce is in for a busy season.”[8] Adobe agrees ecommerce will be big this year; however, the company’s prediction is a bit lower than eMarketer’s prediction. “Adobe is predicting a record $240.8 billion in U.S. online spending this year, driven by steep discounts and the rise of mobile shopping.”[9]
Concluding Thoughts
If I were pressed to describe this year’s holiday shopper, I would use the Vericast label calling them “conflicted.” Consumers want to celebrate and save money at the same time. That’s why some experts believe this holiday season will be unique and unusual. Commerce journalist Jason Goldberg explains, “Combined, Walmart and Amazon are taking approximately 38% of every incremental retail sales dollar, making growth very challenging for most other retailers and creating great uncertainty. In 2024, these uncertainties will be amplified by the upcoming presidential election, which historically causes a dip in consumer spending due to heightened economic anxiety.”[10] Caila Schwartz, director of consumer insights and strategy for retail and consumer goods at Salesforce, reports that this holiday season will different because consumer preferences have changed. She explains, “Consumers’ credit balances are increasing because they’re offloading inflation onto high interest credit cards. To balance this risk, consumers are saving more than ever. When asked to rank where their disposable income is going, most consumers said savings is their top priority, followed by physical goods, with experiences coming last. This is in marked contrast to last year when savings ranked last behind physical goods and experiences.”[11]
The answer to the consumer question about whether to spend or save will be the defining characteristic of this year’s holiday shopping season. Kesslen explains, “One in four shoppers told Bankrate they are stressed about the cost of holiday shopping, and only 30% say they already have put money aside for gifts. As far as where shoppers are getting their gifts, 42% said they plan to almost exclusively shop online and just 23% plan to mostly shop in person. More than a quarter of shoppers expect to take on debt to pay for gifts.” That means consumers will be bargain hunting early and often in order to lessen the conflict they might feel!
Footnotes
[1] Ben Kesslen, “Half of Americans will start their holiday shopping even before Halloween,” Quartz, 5 September 2024.
[2] Helen Atkinson, “Is Christmas Coming Early? Retailers and Consumers Seem to Be Making it So,” SupplyChainBrain, 10 September 2024.
[3] Aaron Cheris, Kurt Grichel, Stephanie Koszyk, Darrell Rigby, and Suzanne Tager, “2024 Holiday Shopping Outlook,” Bain & Company, 10 September 2024.
[4] Doug Bonderud, “Consumer Spending Trends: How Much Will Holiday Shoppers Spend This Year?” Salsify Blog, 25 June 2024.
[5] Sheila Morin, “2024 Holiday Shopping Trends Unwrapped,” Coveo Blog, 12 September 2024.
[6] Betty Lin-Fisher, “Consumers are expected to spend more this holiday season,” USA Today, 12 September 2024.
[7] Press Release, “The 2024 Holiday Season Will be a Battle of Saving Versus Spending, According to Data from Vericast,” Vericast, 11 July 2024.
[8] Haylee Reed, “Top Ecommerce Holiday Trends for the 2024 Season,” Big Commerce, 2024.
[9] Francisco Velasquez, “It looks like holiday shopping is about to get a big boost,” Quartz, 25 September 2024.
[10] Jason Goldberg, “The Holiday 2024 Shopping Season Will Be Unlike Any Other,” Forbes, 29 May 2024.
[11] Caila Schwartz, “Holiday Shopping Will Look Different This Year as Shoppers Take on More Debt,” 18 June 2024.
