A truncated holiday spending period with fewer days between Thanksgiving and Christmas and the election will throw a curveball to retail sales this season, our analyst Sky Canaves said on an episode of the “Behind the Numbers: Reimagining Retail” podcast. In-store retail will see healthy growth, consumers will continue holding back on splurges, and mobile will uplift overall ecommerce. Here are three trends we’re predicting for the upcoming holiday season.
“[Physical] stores are poised to do really well this year, especially after a few very unusual years in 2021 and 2022 when stores rebounded from the big dip in 2020,” Canaves said.
“This highlights just how important it is for retailers to prioritize the in-store experience, customer service, and differentiating what they can offer seasonally,” Canaves said.
“This will be a very highly promotional holiday season,” our analyst Zak Stambor said, due to consumers’ growing focus on value, as well as heightened pressure on retailers to move inventory in a shorter time frame between Thanksgiving and Christmas. Competitive promotions will also help capture consumer attention against a flood of major shopping events.
Waning consumer confidence will drive category growth for smaller-ticket items. The categories that will see the largest holiday retail sales growth in the US are food and beverage (10.0%), apparel, footwear and accessories (6.6%), and health and personal care (6.6%), per our forecast.
“It reflects how people tend to shop and look for products during the holidays, especially Thanksgiving week when they’re at home, in front of their TVs, and seeing ads,” Canaves said. The mobile phone is the connective tissue for cross-channel shopping, she said, whether it’s closing the purchasing journey from a connected TV ad or from a physical store that had limited selection.
“[Mcommerce’s growth] is why big ecommerce players like Amazon, Walmart, and Target are all investing heavily in their apps—to keep consumers there, collect more data about them, and also boost loyalty and membership programs,” Canaves said.
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