The Holiday Shopping Forecast: Distractions and Deal-Hunting in 2024

As the holiday season approaches, a storm of factors—including critical elections, erratic weather, and evolving consumer behavior—will mold shoppers’ spending habits this year. Despite uncertainties, predictions suggest that holiday spending will see a modest increase compared to the previous year.

Cheerful holiday window displays attract shoppers in New York City.

According to the National Retail Federation, holiday spending for November and December is expected to rise by 2.5% to 3.5%, with total projected expenditures between $979.5 billion and $989 billion. Although this marks a step back from last year’s robust growth of 3.9%, there is cautious optimism as consumers intend to indulge more in decorations and experiences this season while tightening their purse strings on gifts.

1. Impact of Consumer Sentiment on Spending

In the run-up to the holidays, consumer confidence plays a pivotal role in spending. Deloitte’s recent survey indicated that consumers are planning to allocate $1,778 on holiday purchases, an uptick of 8% from last year. The survey reveals preferences shifting towards less focus on gifts, as consumers express their intention to enhance their holiday atmosphere through decorations and experiences rather than material possessions.

Shoppers appear to be approaching the holiday rush with a more strategic mindset this year. A deal-hunting mentality is apparent, with nearly 80% of consumers indicating they will participate in deal events during the months leading up to Christmas. The shift in priorities reflects an understanding of how to stretch their budgets further, a trend fueled by the necessity of thoughtful spending in the face of lingering inflation concerns.

Shoppers prepare for Black Friday sales in California.

2. The Deal-Hunting Approach

Retailers can expect a more promotional environment this holiday season. With discounts and sales more widespread, brands are likely to compete fiercely for consumer attention. This year, consumers are anticipated to decrease their gift expenditures by 3%, while at the same time, they plan to splash out 16% more on experiences—perhaps indicating a broader shift in what holiday joy means to them.

As the holiday shopping landscape transforms, a greater emphasis on shopping experiences—activities such as festive gatherings and travel—over material items is shaping the market. Retailers will need to adapt to this deal-hunting mentality and balance their offerings accordingly, ensuring they cater to this evolving consumer preference.

3. The Shadow of Elections

Amidst these consumer dynamics, the upcoming presidential election looms as a profound distraction. With votes being cast on November 5, many brands and retailers express concerns about the potential adverse effect on holiday shopping. SharkNinja CEO Mark Barrocas aptly referred to the election as the “biggest unknown” influencing the season, as the ongoing political discourse could impact consumers’ readiness to spend.

Historically, major events such as elections shift public focus, and the holiday shopping season may not be insulated from this reality. Observers will be keenly watching if the electoral buzz diverts attention from the shopping lists, or if the holiday spirit prevails, allowing for celebrations amidst the chaos.

Campaign signs dot the roadside as the election nears.

4. Weather Woes Ahead

On top of political distractions, the unpredictability of the weather poses another curveball for consumers and retailers. The volatile climatic conditions, marked by unseasonably warm temperatures and devastating hurricanes affecting states like North Carolina and Florida, have significant implications for seasonal shopping. For instance, shoppers may think twice about purchasing winter attire if they experience warm spells leading up to the holidays.

Moreover, with fewer days between Thanksgiving and Christmas than the previous year, consumers will be racing against time to complete their shopping. This urgency, coupled with external pressures, may change how and when shoppers make their purchases.

Conclusion: Navigating the Holiday Maze

As Mark Barrocas highlighted, “Christmas is going to come; it’s just a matter of how many distractions there are.” The interplay of consumer sentiment, political events, and climatic unpredictability creates a multifaceted environment for both shoppers and retailers this holiday season. With challenges to navigate, the success of the shopping season will depend on how well brands can adjust to shifting consumer priorities while maintaining engagement in a landscape full of potential distractions.

Let’s keep an eye on the evolving dynamics as the festive cheer approaches, hoping this season brings joy and boisterous spending for all.

An iconic symbol of holiday spirit is on its way to the Capitol.

In a simpler note, Loveland, Colorado, will also play host to the U.S. Capitol Christmas tree on November 11, as it makes its 4,000-mile journey from Alaska to Washington, D.C. This event symbolizes the holiday spirit, providing a perfect backdrop for community gatherings and celebrations as the festive season rolls in.

As we approach the end of the year, we’ll need to see how these overlapping narratives play out in shaping consumer habits and the overall retail landscape.