Based on forecasts for this year, we expect a strong holiday shopping season. In addition to an overall increase in spending, the season will also highlight several macro trends. For example, the holiday shopping season is starting earlier, the omnichannel experience is growing in importance, and the evolving buying habits of Millennials are leading to even more in-store sales.
The consensus among several leading industry observers this year is that shoppers will spend between 3.5% and 4.5% more this holiday season than they did in 2016.
Consumer confidence and the economic benefits of a robust shopping season aren’t the only signs I’m watching closely. Buying preferences continue to change in a big way.
For instance, the holiday shopping season seems to start earlier each year with decorations and displays already popping up in the aisles and windows of stores. Two of three respondents in our recent survey of more than 2,000 American shoppers (66%) said they were planning to start holiday shopping before Thanksgiving.
Some are even more eager to cross off their lists. More than a quarter of respondents (27%) planned to do holiday shopping as early as August. This year, the longer shopping season comes with an extra shopping day on the calendar between Thanksgiving and Christmas, giving shoppers a few more hours to make their purchases.
The closely watched Millennial demographic also continues to surprise us. This holiday season, 92% of millennials plan to spend money in a physical store, amounting to more than $550 on average for holiday gifts and related items, our survey noted. Though this comes as a shock to some, the percentage of Millennials who plan to shop in store this season is actually in line with the number we saw last year and the year prior.
The retailers that will win this holiday recognize shoppers are increasingly making decisions online but also want the convenience of a physical location to pick up orders or browse a sales floor. Walmart has introduced “Pickup Towers” in some of its stores. The orange kiosks can fulfill online orders on the spot in less than a minute, the company says. Online and offline options are converging at the other end of the shopping experience, too. Department store chain Kohl’s recently announced a partnership allowing customers to return Amazon purchases at 82 locations starting this month.
While the momentum around convergence continues to grow, physical stores remain the dominant format. Not only are holiday surveys highlighting the high percentage of people who expect to shop in physical stores, but occupancy rates for shopping centers are also high, standing at 92.7%, which is in line with 2016.
The upcoming holiday shopping season will confirm the importance of omnichannel retailing. Today’s consumer wants a personal and seamless experience in both the physical and digital world. As consumers participate in the annual ritual of shopping over the holidays, you’ll also see them grab a bite to eat, catch a movie, or browse for stocking stuffers when they stop to pick up online purchases in a store.
