Experts predict robust 2023 holiday spend

Weeks ahead of the 2023 holiday season, analysts expect retail spend to exceed last year's levels as shoppers leverage an array of digital payment methods.

The National Retail Federation forecast, released Nov. 2, 2023, predicts in-store spending of between $957.3 billion to $966.6 billion in November and December, an increase of 3 and 4 percent, respectively, over 2022. These numbers are consistent with an average annual uptick of 3.6 percent from 2010 to 2019, according to Matthew Shay, president and CEO of the NRF.

"It is not surprising to see holiday sales growth returning to pre-pandemic levels," he said. "Overall household finances remain in good shape and will continue to support the consumer's ability to spend."

Jack Kleinhenz, NRF chief economist, mentioned that the pandemic pushed shoppers to online and digital commerce methods, which may increase by 7 to 9 percent this year to between $273.7 billion and $278.8 billion, up from $255.8 billion during last year's holiday season.

"Consumers remain in the driver's seat, and are resilient despite headwinds of inflation, higher gas prices, stringent credit conditions and elevated interest rates," Kleinhenz said. "We expect spending to continue through the end of the year on a range of items and experiences, but at a slower pace. Solid job and wage growth will be contributing factors this holiday season, and consumers will be looking for deals and discounts to stretch their dollars."

NRF's press briefing is available at nrf.com/media-center/press-releases/2023-holiday-reach-record-spending-levels

Doubling down on digital

Consumers will also be using non-cash payment methods, according to OnePoll and Melio's survey of 1,000 small business owners. Findings, released Nov. 2, 2023, show most respondents believe that accepting multiple payment methods, beyond cash, is crucial in today's economy.

Tomer Barel, president and COO of Melio, stated that inflation has placed undue pressure on small business owners, many of whom are leaning into digital commerce technologies.

"Despite the challenges posed by inflation and interest rates, small business owners seem to adapt to the current economic climate and demonstrate impressive agility and resilience" he said. "Small businesses are the foundation of the economy, and it is critical that they have the tools to overcome future challenges."

Prashant Gandhi, chief business officer at Melio, agreed the small business segment is embracing digitization.

"It's tough to keep a small business in business – SMBs are dealing with material cost increases across multiple areas such as input prices, salaries, rent, and capital costs," he said. "The silver lining is that 1 in 4 (25.80%) businesses are leaning heavily into digitizing their business."

Tough choices

Gandhi further noted that many of the numerous small and midsize business owners surveyed had to make tough choices to stay in business amid rising inflation and economic uncertainty, such as tapping into savings or taking out loans (61 percent) and raising prices (50 percent). Following are additional survey highlights: 


• Increased advertising: A majority of SMBs (66 percent) saw a need to promote their services and stepped up advertising and marketing campaigns. 

• Enhance online presence: More than two-thirds (67 percent) of SMB respondents believe having an online presence is more important than ever. 58 percent have increased their digital presence and 52 percent began selling products and services online during the past year.

• Automation, digitization: More than half (51 percent) of small businesses are interested in digitizing or further digitizing inventory management; 42 percent are exploring digitizing inventory management.

Additional survey data is available at www.prnewswire.com/news-releases/majority-of-small-business-owners-optimistic-about-financial-health-new-survey-finds-301975446.html

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

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