Wednesday, November 27, 2024
Meanwhile, a new survey by the consultancy Deloitte revealed that 80 percent of American consumers will shop during the Black Friday-Cyber Monday shopping weekend (which actually begins on Thanksgiving) and they plan to spend record amounts.
"This year we have a shorter holiday shopping season with the late Thanksgiving," said Brian McCarthy a principal at Deloitte Consulting LLP. "Combined with a deal-focused consumer, we can expect to see holiday shoppers spend big during Black Friday-Cyber Monday (BFCM) promotions as the seek to close out their holiday shopping lists in a shorter timeframe."
According to Deloitte, consumers expect to spend a record $650 during BFCM shopping events (Thursday. Nov. 28 through Mon. Dec. 2), which is 15 percent more than the same period last year. More than half (53 percent) of consumers surveyed plan to use credit cards, up from 35 percent in 2023, to stretch their gift-buying budgets; 62 percent plan to use financing methods like buy now, pay later. Overall, financing and credit card usage will be highest among millennials, the consultancy found.
Consumers will spend more than half their holiday budgets (56 percent) during the BFCM period, up from 47 percent in 2023, further underscoring the importance of the holiday week for seasonal shoppers. "Consumers are relying on this week to stretch their dollars," said Stephen Rogers, managing director of the Deloitte Insights Consumer Industry Center. "Black Friday-Cyber Monday is all about value; this year all income levels and age groups are looking for deals."
Some of the biggest spending boosts will be among lower and higher income consumers. Surveyed consumers with household incomes above $200,000 plan to spend considerably more than other groups – at $1,257, a 20 percent increase over 2023 holiday spending. Those in lower income brackets (less than $50,000) plan to spend 22 percent more than they did last year.
BFCM spending has accelerated since 2021. The three-year compounded annual growth rate (2021-2024) is 13.2 percent; it's even higher among Gen Z shoppers (25 percent), Deloitte surveyors found.
There is a significant preference for shopping at online-only retailers (69 percent of surveyed consumers) during the holiday shopping weekend, marking the first time online-only retailers took the top spot as the preferred retail shopping format. Sixty-five percent of surveyed consumers indicated a preference for shopping at mass merchants during the BFCM period.
"This reinforces the importance of offering a consistent omnichannel experience to draw in consumers whether they plan to shop in-store, online, or both," McCarthy said.
Deloitte's survey revealed that consumers expect to shop an average of four gift categories, with top categories ranging from clothing and accessories (77 percent) to pet products (29 percent). The NRF and Prosper also surveyed consumers on their gifting plans and, like Deloitte, found clothing and accessories to be the top purchasing category, with 54 percent of consumers planning buy clothing and accessories to gift.
Forty-four percent of consumers surveyed by the NRF and Prosper plan to purchase gift cards, with overall spending on gift cards totaling an estimated $28.6 billion. Similar to previous years, the average shopper will purchase three to four gift cards, spending an average of $51.18 per gift card.
Other popular categories of gift-buying, based on the NRF-Prosper survey, include: toys (36 percent); books, video games and other media (31 percent); food and candy (30 percent); and personal care or beauty products.
"The holiday season is in full swing and while many consumers have made progress on their shopping lists, most shoppers will make the majority of their purchases over the coming weeks," said Katherine Cullen, NRF vice president of industry and consumer insights.
Earlier this month, the NRF forecast holiday spending would reach record levels during November and December, growing between 2.5 percent and 3.5 percent to total between $979.5 billion to $989 billion.
Deloitte published a more optimistic set of estimates in September. The consultancy projected holiday sales will total between $1.58 trillion and $1.59 trillion during the November to January timeframe. It forecasted a 7 percent to 9 percent increase in ecommerce sales compared with the same period last year.
"Following a sharp rise in spending post-pandemic, this season's retail sales are expected to moderately increase in line with trends over the past decade," said Michael Jeschke, principal at Deloitte Consulting, and a retail and consumer products leader. 
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