Recently, both Walmart and Target have warned that consumers’ cautious spending habits may lead to a sluggish holiday season this year.
Were they right to be worried? Here’s how the holiday shopping season is going so far.
The stat: Over half (60%) of holiday season spend to-date was driven by five categories, according to Adobe Analytics—electronics ($21.7 billion), apparel ($19.2 billion), furniture ($14.7 billion), grocery ($6.8 billion), and toys ($3.1 billion).
What it means: Categories like electronics and apparel, which struggled throughout the year as consumers cut back on discretionary spending, may get a holiday boost. However, this spending was likely influenced by major discounts across all five discretionary categories during the Cyber Five period. For example, electronics’ discounts peaked at 31% off listed price during Cyber Monday, followed by toys (27%), apparel (23%), furniture (21%), and appliances (18%).
The stat: US holiday retail ecommerce sales will grow 11.3% this year, outpacing brick-and-mortar’s 3.0% growth rate, per our June 2023 forecast. Still, physical stores will make up over 80% of total holiday sales this year.
What it means: Consumers are still shopping in-store, but they’re also increasingly turning to ecommerce as they seek out better deals and more convenience. It’s never been more important for retailers to have an omnichannel approach, aligning both in-person and digital channels to create a seamless journey.
The stat: On Cyber Monday, shoppers used buy now, pay later (BNPL) services to pay for $940 million worth of online purchases, the biggest day ever for BNPL, per Adobe Analytics.
What it means: BNPL is here to stay, particularly among millennials and Gen Zers, who will represent 60 million BNPL users next year, per our June 2023 forecast. To appeal to younger consumers, BNPL providers like Klarna are adding features like shoppable videos and an AI-powered shopping lens, which allows shoppers to take a picture of items in their surroundings and instantly find out where to buy them in the Klarna app.
The stat: 44% of consumers will use AI in their holiday planning, per 84.51°. The top three use cases are making a grocery list, finding new recipes, or finding new gift ideas.
What it means: Consumers may still be wrapping their heads around how AI can fit into their everyday lives, but there are popular use cases emerging, particularly around inspiration, discovery, and administrative tasks.
This was originally featured in the Retail Daily newsletter. For more retail insights, statistics, and trends, subscribe here.
First Published on Dec 7, 2023