Despite Volatility, Retail Outlook Strong for Holiday Season 22 – Sourcing Journal
There are 73 days left until Christmas. And until then, retailers will be watching inflation, supply chains, employment reports, gas prices, weather, and anything else (should we even mention “pandemic”) that might affect their vacation prospects, which are – at the time of this writing – looking good.
Mastercard SpendingPulseThe annual holiday forecast predicts that retail sales in the United States (excluding autos) will increase by 7.1%.
“This holiday season, consumers may find themselves looking for ways to navigate inflationary environment – from finding deals to making compromises that allow extra headroom in their gift giving budgets,” said Michelle Meyer, Chief U.S. Economist, Mastercard Economics Institute. “New job creation, rising wages and persistent savings should have many consumers ready and able to spend.”
The National Retail Federation (NRF) says nearly half of all consumers (44%) believe it is best to buy gifts and other seasonal items now, “because they believe inflation will continue to have an impact on prices later in the year. Another 31% think it’s best to buy items now because deals won’t improve. »
The NRF’s Jack Kleinhenzchief economist, says that despite consumer concerns about inflation, rising interest rates and the possibility of a recession, consumer confidence improved in September for the second month in a row and spending continued to grow.
“Consumers have become cautious – but they haven’t stopped spendingwrites Kleinhenz in the October NRF Monthly Economic Review. “The growth rate is not as high as last year, but households continue to spend each month as more jobs, wage growth and savings support their finances and help them cope with higher prices.”
Mastercard SpendingPulse awaits sale of clothing gifts to see a 4.6% increase over last year.
That’s expected to translate to consumers spending about $661 on holiday gifts this year, according to the 2022 Cotton Incorporated. lifestyle monitor™Survey. Those with household incomes over $50,000 expect to spend $815 this season. Clothing is always a top gift during the Christmas season, and this year consumers expect to spend around $323 on clothing gifts. Most shoppers (64%) say they plan to spend the same amount of money on apparel gifts this season as they did last year.
By comparison, holiday shoppers expect to spend $354 on electronics, $200 on experiential gifts like vacations or activities, $168 on gift cards and $102 on home textiles, according to the Monitor™research.
Echoing industry experts, consumers admit they are concerned about inflation and supply issues. The Monitor™ shows that two-thirds (66%) say the current economic situation/inflation will affect their holiday shopping and nearly 6 in 10 (58%) say they are somewhat concerned about product availability, while 12% are very concerned. In fact, more than a third (35%) are worried about the impact of inflation on their clothing gift purchases.
To counter any potential issues when rating desired gifts, 45% of consumers plan to search online to see where they can find in-stock products, according to Monitor™ search. As it stands, 12% of shoppers plan to start buying gifts in October, 27% in November, and 9% in December. The most popular shopping days are Black Friday (55%) and Cyber Monday (44%), followed by the week before Thanksgiving Day (27%), the national free delivery days held in mid – December (21%), Thanksgiving Day (16%), Green Monday (14%), Christmas Eve (8%) and after Christmas (6%).
Consumers are also willing to shop more stores than usual to find what they want (27%), according to Monitor™ search. And if it comes down to that, 19% of shoppers say they’ll try a new brand or similar product.
But when it comes to clothing gifts, retailers and brands should know that most consumers (75%) will be looking for natural fibers like cotton and wool, according to Monitor™ data. Additionally, the majority (63%) are willing to pay a little more money for clothes made from natural fibres. Shoppers say they look for cotton when shopping for clothing gifts because it’s comfortable (65%), soft (57%), breathable (52%), a quality fabric (46%), pleasant to the touch (44%) and durable. (42 percent).
As for where they’ll shop, holiday shoppers plan to buy half of their gifts in-store (51%) and the other half online (49%), according to the Monitor™research. Consumers expect to buy most of their clothing gifts from Amazon (22%), mass merchants (18%), chain stores (10%), off-price stores (9%), department stores (7%), specialized stores (6%). %), fast fashion stores (5%), outlet stores (4%), warehouse clubs (3%) and sporting/outdoor stores (2%).
Google’s Think With Google consumer insights revealed that searches containing « near me in stock » increased by more than 90% in the United States since last year. The search engine says retailers and brands should consider this as a way to turn omnibuyers into customers. Plus, shoppers are used to spontaneity and convenience: Across all channels, searches containing “store open” grew more than 400% globally year-over-year.
Among those planning to shop online, mobile phones will be used the most (53%), followed by computers (37%), then tablets (10%), according to Monitor™ search. And of those who plan to shop in-store, many (48%) say they prefer to do so because they enjoy the overall holiday experience, such as decorations, music and people.
But whether shopping is done online or in-store, industry experts predict shoppers will be looking for deals more than ever this year.
“This holiday retail season is bound to be much more promotional than the last,” said Steve Sadove, Senior Advisor to Mastercard and former CEO and Chairman of Saks Incorporated. “Easing supply chain issues, coupled with rapidly changing consumer spending trends and excessive order inventories, left retailers in an attractive position ahead of the holidays. Retailers who were able eliminating past merchandise and accurately forecasting inventory needs will be best positioned for growth.”
The Cotton Incorporated Lifestyle Monitor™ is an ongoing research program that measures consumer attitudes and behaviors around clothing, shopping, fashion, sustainability, and more.
For more information on the Lifestyle Monitor™ survey, please visit https://lifestylemonitor.cottoninc.com/.