This year features an unusually short holiday shopping season, with five fewer days between Black Friday and Christmas compared to 2023.
But even as retailers face that challenge, consumer holiday spending is expected to reach a record high this year: $902 per person on average, an increase of $25 from last year, across gifts, food, decorations and other seasonal items, according to the National Retail Federation’s (NRF) latest consumer survey. The Conference Board Holiday Spending Survey made a similar prediction of the average U.S. consumer’s intent to spend $1,063 this season.
Additionally, a record 197 million consumers shopped in-store and online from Thanksgiving Day through Cyber Monday this year.
Why is spending expected to be so high? Partly, it’s inflation: the cost of goods has gone up this year. But another reason is that people are simply feeling the holiday cheer. According to the Consumer Confidence Index®, U.S. consumers feel especially happy heading into the holiday season – wanting to give gifts and celebrate. The majority of holiday budgets will be spent on gifts.
But even with a generous mindset, Americans still look to save.
Consumers and retailers are both leaning into deals.
Shoppers are demanding deals this year, and retailers are responding. S&P Global Ratings notes that retailers held more deal events prior to Black Friday and Cyber Monday due to the shorter length of the holiday shopping season.
Amazon hosted Prime Big Deal Days in October, and other retailers followed suit. Also in October, Target held its Circle Week sale, Walmart hosted its Holiday Deals event and Best Buy ran a 48-hour flash sale to compete.
Earlier deals have proven to be a smart sales strategy for retailers because 66% of consumers say sales are the most important factor in their holiday shopping decisions this year.
Continued inflation has made shoppers more cost-conscious – but 89% say they’re tempted to spend more than they should, according to a national consumer survey from Experian. This isn’t surprising, given that throughout 2024, consumers have spent more on discretionary goods than many analysts expected.
Shoppers started buying earlier this year.
Retailers are putting more money toward advertising this season, beginning earlier than usual to make up for the lateness of Thanksgiving – inspiring people to shop early.
According to the NRF, cost-conscious shoppers say they’re buying earlier to score can’t-miss deals and spread out their budget, as well as to avoid the stress of last-minute shopping. They plan to shop both in-store and online: 57% expect to make purchases online (holiday shoppers will spend a record $241 billion online this year); 46% to shop in stores; and 45% to hit discount stores for gifts and seasonal items.
Most shoppers are also looking to buy a gift – or more – for themselves this year.
What are consumers buying this holiday season?
Gift cards, as expected, are on top of shoppers’ lists: four in 10 are planning to buy gift cards this season. They’re also the gift consumers say they most want to receive.
Expect popular product categories to be similar to previous years. According to the NRF, the top five most popular gift categories in 2023 were:
- Clothing
- Gift cards
- Toys
- Books, video games and other media
- Food and candy
Alcohol will also be among the top products shoppers plan to purchase this holiday, according to Numerator.
What quirky products will be popular this year? Google’s Holiday 100 list for 2024, which highlights trending search results, includes nostalgic Y2K items, comfy “pillowsacs,” slogan shirts and foot massagers, among other products. Good Housekeeping predicts that the most popular items will include digital picture frames and an ice cream maker, along with typical jewelry, makeup and wellness items.
Despite the obstacles retailers faced this year, including inflation and a shorter shopping period, consumers are in the holiday spirit. Their larger holiday budgets reflect not only a sense of optimism but the collective desire to celebrate meaningful experiences after years of uncertainty.