By Bruce Winder
Holiday 2024 is now in full flight, building up to the pinnacle Black Friday and Cyber Monday shopping sprees. But this year has both challenges and opportunities for retailers and consumers alike. So, what are some of the trends this year?
Based on the numerous holiday 2024 surveys from firms such as PwC, Deloitte, Leger, Salesforce and most recently BMO, it sounds like consumers’ spending could range anywhere from growing 10% on the optimistic side to being down on the pessimistic side. So where will the consumer end up?
If I had to make an educated guess, I would say consumer spending will be down a little (~1-2%). Why? One needs to put oneself in the shoes of the consumer to answer that question. Inflation is finally at 2% but prices from 2019 until now are significantly higher (+15%). Interest rates are coming down quickly but still elevated (Bank of Canada key interest rate is 3.75%). Unemployment is fairly high at 6.5% and consumer debt has ballooned again to $ 2.5 trillion (as of Q2 2024). One of the only things driving sales is Canada’s growing population. Affluent consumers are helping too, as US stock markets and big city real estate prices are topping out. Having said that, luxury retail has for the most part been suffering.
As I write this article supply chains are under threat. Both the ports of Vancouver and Montreal have just recently re-opened due to labour disputes, and now the latest Canada Post strike is creating a backlog that will cause mail and parcel services delays across the country that are expected to extend well into 2025. Another knock-on effect of the pandemic as workers negotiate wages to keep up with what they have lost in purchasing power over the last few years when inflation soared.
Consumers are looking for value from retailers to stretch dollars in gifts, travel, food and other holiday expenses. Watch for strong discounted offers, particularly on discretionary items as consumers spend more on essentials. Loyalty program rewards will be turbocharged and credit card tapping will be in full force. Buy now, pay later programs (BNPL) will gain popularity.
Consumers are also getting creative and doing holiday spending differently this year. Thrifting has become popular as shoppers buy unique, experienced items on Facebook Marketplace that help them save money. Buying for less people is also gaining traction as some consumers pick names out of a hat (a.k.a secret Santa) and buy for one other person in their family. Online shopping habits are shifting, with Deloitte estimating 43% of holiday budgets will be spent online. Over the past three months, 33% of consumers have turned to emerging platforms like to maximize their purchasing power. Low-cost marketplaces like Temu, alongside established players like increasing their competitive efforts, are driving this trend. Shoppers are now reevaluating product costs; once skeptical of low prices and questioning quality, many are now asking why similar-quality goods cost so much more elsewhere.
Look for AI to increase its use through extreme personalization and search capabilities to engage consumers. Marketing dollars are always being scrutinized (and rightly so) as AI becomes vital to increase ROI through super targeting. Advanced ChatGPT-esque search capabilities can increase conversion, while personalization can increase average sale and cross merchandising sales.
So, hang on to your sleigh handles and buckle up for an interesting holiday 2024 shopping period!
(Author: Bruce Winder, a retail analyst, advisor and speaker with 30+ years experience in big retail, consulting and teaching)
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