This week officially kicks off the busiest shopping period of the year — it's joy and chaos for shoppers and a make-it-or-break-it season for most retailers.
People are expected to spend up to $989 billion this holiday season — a record. The National Retail Federation predicts retail sales this winter will be up to 3.5% higher than last year. So far in November, shoppers have spent 9.6% more just on online purchases, according to Adobe Analytics, which tracks transactions.
Some of the higher spending is because of higher prices. But that's not the whole story: A greater share of people also plan to splurge this holiday season, according to a survey by market research firm Circana that closely tracks buying trends. It found people budgeting, on average, $771 for the holiday season. Parents are expecting to spend $1,014 on average. Children, as any parent will tell you, are expensive.
Even though inflation has been cooling for much of the year, people say they are feeling squeezed after paying their expenses. And when budgets tighten, days known for big discounts take center stage. Overall, retailers expect a record number of shoppers between Thanksgiving Day and Cyber Monday.
"This year, more consumers see the holidays as a break from everything that's happening in the world," wrote Marshal Cohen, Circana's chief retail adviser, "and more plan to buy more gifts for others to bring them joy during challenging times."
Deals are the name of the game
In Circana's survey, 62% of people said their higher expenses on food and bills would lead to changes in how they shop. They're hunting for off-brand purchases, maybe buying fewer gifts or cheaper gifts and — especially — hunting for discounts.
Are the deals actually any good? That's the perennial question. And, as usual, the answer is mixed.
Thanksgiving falls later this year, which means fewer days between now and Christmas. Retailers have less time to sell holiday gifts and decor. This has analysts predicting that companies will keep offering discounts.
"If we don't see the sales numbers expected by retailers over the next few weeks, we could see further discounted items in December to move inventory before the new year," said Adam Davis, managing director of retail finance at Wells Fargo.
When are the deals best? Adobe offers predictions for online shopping specifically: Thanksgiving Day could have the biggest discounts for toys, sporting goods, furniture and appliances; Black Friday for TVs; Saturday for computers; Cyber Monday for electronics and clothes. Electronics discounts could hit 30% on Monday, Adobe forecasts.
Shopping for classic gifts and a bit of fun
The top things people buy this weekend rarely change. There are the electronics and gadgets, clothes and accessories, toys and gift cards.
Gifts people buy for themselves is one category that can shift with the economic vibes. This year, people are expected to spend about $44 more on themselves compared with last year. Nearly half of shoppers plan to buy themselves something, according to Deloitte's annual consumer survey.
Top toys are expected to include Legos, Hot Wheels and Barbie. Adobe also name-checks Pokémon trading cards, Tonie and Spider-Man figurines and slime-making kits. For adults, hot sellers include Dyson Airwrap hair-stylers, Bluetooth speakers, fitness trackers and pickleball paddles. Circana notes that more people are planning to buy beauty products, footwear and luggage.
And the trend of gifting experiences remains strong: More than half of shoppers surveyed by Circana said they planned to buy gift cards or tickets — to eat, travel, catch a game or show, or relax at a spa. Certificates for classes, adventures and other participatory events make up a growing share of these gifts.
That makes sense to Betsy Brushway.
"We're big travelers, so we want to kind of cut back on the holiday gifts and spend more time getting out and exploring the world," said Brushway during a recent visit to Mall of America near Minneapolis from her home in Kentucky. "My husband and I have set a budget this year for holiday shopping, so we're going to stick to that budget."
Increased expenses, particularly health and car insurance, put a damper on her spending, she said. Still, she had ordered Nike shoes from her nephew's wish list and was on the lookout for her "very girly" niece.
"I'm pretty frugal myself. I'm a saver," Brushway said.
But the holidays are an exception. "For Christmas, I like to spoil my family. They do a lot for me, so I like to get them something a little special."
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