This holiday shopping season is shaping up to have slower but steady growth compared to the splurges of seasons past, as inflation and economic concerns make consumers more selective with their spending.
Overall retail sales during November and December are forecasted to rise around 3-4% according to estimates from Mastercard and the National Retail Federation. This represents a return to more modest, pre-pandemic levels of growth after the volatile swings of recent years.
The growth in online revenue is expected to outpace overall retail, but still down from heights seen during the pandemic. Adobe Analytics predicts around 4.8% US online sales growth, while Salesforce estimates just 1% growth for the period.
Early holiday shopping events have reinforced consumer price consciousness, with Black Friday seeing a record $9.8 billion in online purchases but driven largely by deep discounts per Adobe data. Their figures showed online Black Friday spending rose 7.4%, significantly below growth rates of over 20% during the pandemic. Shopify saw more robust 22% Black Friday growth from its merchant base mostly from sales of apparel and jewelry.
Cyber Monday is still primed to capture the most online sales of any day, though forecasts of $12 billion indicate softer gains for retailers after adjusting for inflation. Consumers browsing over the long weekend found average site wide discounts of 30%, well above pre-pandemic levels as retailers compete aggressively on price to attract wary shoppers.
Toys, electronics, apparel and personal care products remain top categories so far. For budget-focused gift givers, analysts recommend waiting until Cyber Monday itself for optimal tech and furniture deals and the following Sunday for best toy and clothing bargains.
With the chestnut of holiday songs urging not to be a miser, consumers have shown they remain willing to spend this season. Just likely focused on value to make that dollar go further. Retailers in turn will need to continue wielding discounts to coax sales closer to their targets come year end.