Even though the purchasing power of shoppers has improved over last year, people are likely to remain cautious, being selective on what they buy this holiday season, according to several studies.
“The resilient economy in 2023 — which has been a story of positive surprises — has buoyed the shopper,” according to a Mastercard Economics Institute (MEI) report. While shoppers can spend more this holiday season, which begins on November 1, they still want discounts and deals, and retailers are expected to provide them.
“With numerous choices and tightening budgets, you can anticipate shoppers to be increasingly selective and value-focused,” Steve Sadove, Mastercard senior advisor, said in another study, the Mastercard SpendingPulse report. “We expect the most effective holiday strategy will be to meet consumers where they are — personalized promotions to in-store experiences will be key in doing so.”
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Both reports align with one released earlier this year, which showed that about 80% of 1,000 consumers surveyed are planning to spend less on gifts this holiday season as they continue the price-conscious behavior that they adopted during the pandemic. The report, by automation platform Celigo, showed that the majority of respondents expressed an intention to prioritize value and seek cost-effective options when holiday shopping.
Electronics purchases to rise
U.S. retail sales — excluding the automotive market — are forecast to climb 3.7% during the season, compared to the same year-ago period, the SpendngPulse report shows.
The report, which measures in-store and online retail sales across all forms of payment and is not adjusted for inflation, shows that shoppers are likely to gravitate slightly more toward online shopping, which is expected to rise 6.7% from the same year-ago period, than in-store shopping, where a 2.9% increase is forecast.
Shoppers are also expected to head to the electronics, gadgets and gaming aisle, where sales are expected to increase 6% from last year. Eating at restaurants also will likely grow 5.4% over last year.
Spending less and setting limits
If you are looking for a way to help keep costs under control, you might find the 50-30-20 rule useful. The rule, a form of budgeting, splits your monthly after-tax income into three major categories: necessities, wants and savings. Find out more here.
For ideas on where to find deals, check out 17 deal sites and tools for finding online shopping bargains.
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