Retailers are bracing for the upcoming holiday season, hoping it's not a flop. There are a few reasons to think it may not be. With gas prices plunging, some economists believe consumers will get a tailwind for the holiday shopping season.
More consumers are also expected to shop online as that is where they believe better deals will be found. With inflation high, consumers are looking to stretch every penny.
Cisco AppDynamics recently completed a survey of consumer spending. They found that 59% of consumers are expected to shop online this year vs. 53% in 2022. By going online, consumers are looking to save more, have more choices, and avoid the chaos that can be found in-store. Consumers will also be looking to get the most out of every dollar by spending on important sales dates such as Black Friday and Cyber Monday.
2022 Debt Hangover
Consumers are still feeling the effects of last year's holiday shopping. According to NerdWallet's annual holiday shopping survey, 52% of consumers used credit cards for holiday purchases last year. Of those, 31% still have credit card debt.
But that doesn't seem to have dampened consumer spirits. 74% said they'll use a credit card this year, with the average spend being $680.
Slower Sales Growth for 2023
Over the last decade, sales growth averaged 3.6%, according to the National Retail Federation (NRF). Pandemic holiday spending saw a big spike in sales at 9.3% in 2020 and 13.5% in 2021. However, NRF says retailers shouldn't expect those same numbers in 2023. Additionally, whatever sales figures come out of this holiday season will be inflated due to higher prices.
The NRF's latest consumer survey found that 2 out of 3 consumers said sales and promotions are important in their holiday spending decisions. 40% said they are cutting back on spending on themselves and their gift-giving list, so there is more to go around for holiday items.
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