How and why consumers are giving retailers a Merry Christmas – Part 1

This two-part blog looks at how much consumers are spending this holiday season and why are shoppers buying more than expected.

In October, the National Retail Federation forecasted a 2.8% increase for 2011 holiday shopping and stood by their forecast even after a strong Black Friday weekend suggesting that shoppers were just spending their money early this year. 

It turns out consumers were not listening to the NRF.  This week, following continued strong shopping trends, the NRF raised their forecast to 3.8% increase for the season and reported that November spending was up 4.5% YOY.  The 3.8% forecast is lower than last year’s 5.2% holiday spending increase, but more robust than expected.  Consumers continue to spend as Christmas approaches. 

NRF’s most recent spending survey released this week revealed shoppers have completed less holiday shopping to date than in previous years.  That suggests that much of consumers’ November shopping was for themselves, and there is still a good bit of holiday shopping to come.  Big news and good news for retailers.

Another source of good news is this year’s holiday spending growth online.  Those selling online are having a great holiday season.  Online sales as reported by ComScore have reached $268B for the holiday season to date ending December 12.  This is an increase of over 15% vs. last year.  http://lnkd.in/3xcBTE   

This trend reveals that companies that did not participate in holiday ecommerce have missed key sales opportunities this year.  If you have not started building ecommerce capabilities on your website or at least your retail partner’s websites, you are missing sales and likely losing market share.

Why are consumers spending more and changing their shopping behavior? 

We will discuss that in Part 2.