Midway through the holiday shopping season, analysts were crunching the numbers, providing a "pay-by-pay" analysis of consumer spending patterns. The reports gave some merchants and payment professionals reason to celebrate while possibly motivating others to revisit their promotional strategies.
Year-over-year growth in consumer spending grew a modest 5.3 percent compared with a 7.4 percent increase in 2013, according to First Data Corp.'s 2014 SpendTrend Holiday Shopping Season Analysis, a comprehensive report issued Dec. 8, 2014. The study measured in-store transaction data and consumer spending at over 1 million merchant locations.
First Data Senior Vice President of Information and Analytics Solutions Krish Mantripragada was encouraged by the shift from debit to credit card usage during Cyber Week. He said this trend "may indicate that consumers are feeling more confident about their current financial situation, likely driven by the improvement in the labor market and reduction in gasoline prices."
A Dec. 10 Equifax report noted a rise in consumer debt in major markets across the United States that industry analysts attribute to a rebounding economy and improved housing market. Among the 25 top metropolitan areas, 17 reported a bump in consumer debt in the third quarter of 2014 compared with the same period of the previous year. Houston was the highest at an increase in consumer debt of 6.5 percent, followed by Denver at 4.3 percent and Dallas at 4.1 percent.
The National Retail Federation noted an increase in retail sales of "0.6 percent seasonally adjusted over October and 3.2 percent unadjusted over November 2013," in its own Dec. 11 report. NRF President and Chief Executive Officer Matthew R. Shay, encouraged by moderate but steady growth in consumer incomes and spending patterns, noted that "shoppers are clearly in a better place than last year and the extra spending power could translate into good news for retailers."
First Data cited building materials, garden equipment, electronics, appliances, furniture and home furnishings as the highest performing retail categories, each achieving greater than 8 percent growth in year-over-year consumer spending. Retail winners shared an aptitude for omnichannel commerce, defined by Lorena Harris, Vantiv Inc.'s Vice President of Corporate Marketing, as "the ability to provide a seamless payments experience across channels."
Shop.org, the NRF's digital retail division, explored omnichannel trends in its annual summit held in Seattle in September 2014. A key insight from the conference was the cross-pollination between the in-store and online shopping experiences.
Brad Brown, Senior Vice President of Digital Retail at Recreational Equipment Inc., views this trend as a driving force behind his company's identity and brand. In an interview with NRF blogger Artemis Berry, Brown said that the REI brand offers a consistent experience across all points of a customer's journey that extends beyond any particular website or store.
"We believe these cross-channel experiences will only grow," Brown said, attributing the increase to the growing adoption of mobile platforms that customers can use to get real-time information such as, "Where's the closest store? Do they have what I need in stock?" and "What is the snow forecast for Tahoe?"
A recent report by Goldman Sachs predicted that half of e-commerce will be conducted on mobile devices by 2018. The investment leader predicted that 535 million consumers will use mobile payment technology in 2014, and 686 million will use some form of mobile payments in 2015, with overall mobile payment revenues climbing above $1 billion by 2018.
Growing adoption of mobile payment technologies has changed the retail experience by adding new levels of complexity to transactions. Consumers can review products online and purchase in-store or research in-store and buy online.
Shoppers can change their payment methods even beyond the point-of-purchase, choosing from a variety of products including cash, credit, loyalty points and digital currencies. Most retailers agree on the need to provide a seamless shopping experience that facilitates all phases of the sale, from initial research, to comparison shopping, to managing post-sale purchases.
Don Kingsborough, Vice President and General Manager of Prepaid at PayPal Inc., noted that the impact of omnichannel trends on payment technology has made open source software and interoperability an imperative for leading-edge payment platforms. In remarks at an annual summit of the Smart Card Alliance in 2011, Kingsborough said the new commerce landscape is a changing dynamic in which consumers have emerged from "unknown to known to [finally being] understood." 
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