Consumers plan to spend more than ever this holiday season, according to new polls and research released this week.
Shoppers are expected to spend $902 per person for the holidays, according to new research from the National Retail Federation. The amount is about $25 per person more than last year’s amount and $16 higher than the previous record set in 2019. Consumers plan to spend the most on gifts for family, friends, and more ($641 of the $902), an increase from $620 in 2023. The remaining $261 will be spent on other seasonal items such as food or candy, decorations, greeting cards, and other holiday items.
“The winter holidays are a treasured time for Americans, and they are prioritizing spending on family this holiday season,” NRF Vice President of Industry and Consumer Insights Katherine Cullen said. “Despite the shorter window of time between Thanksgiving and Christmas, retailers are prepared to meet the needs of consumers by providing holiday shoppers with earlier deals and sales and by ensuring inventory is available for the most in-demand items this year.”
A Gallup poll estimates the spending amount to be even higher at $1,014 per person.
“Americans’ apparent eagerness to splurge this holiday season could reflect greater consumer comfort with their finances as inflation has declined to the lowest level since early 2021,” wrote Gallup.
According to Gallup, “The average amount Americans anticipate spending on gifts this season reflects 38% saying they will spend $1,000 or more—on the high end for recent years—while a fairly steady 23% plan to spend between $500 and $999. Less than a third (31%) now plan to spend less than $500, a figure that includes 7% saying they’ll not spend anything.” The share of consumers saying they will spend more than last year (20%) is significantly higher than the historical average of 14%.
However, new data from Salesforce’s latest Shopping Index “reveals a dramatic shift in consumer behavior: two-thirds of global shoppers report that prices will dictate where they choose to shop in 2024, up significantly from 46% of shoppers in 2020,” reported Forbes. Laura Meyer, CEO of retail-focused marketing agency Envision Horizons, told Forbes that retailers should focus on discounting or offering promotions for top sellers or new product launches instead of blanket discounts to draw in consumers.
"As a brand, you need to be intentional about how frequently you run deal pricing; yet offer a lower barrier of entry for new-to-brand consumers frequently enough to drive profitable growth,” Meyer told the outlet.
Nik Sharma of Sharma Brands “suggests alternatives to straight discounting that can protect margins while still offering value to consumers,” wrote Forbes. "Besides discounts which impact your gross margin, you can also consider cashback or offering a free gift with purchase, which increases the perceived value for customers without the same margin impact," Sharma told the outlet.