American consumers are gearing up for the holiday shopping season with a mix of increased spending intentions and underlying insecurity. A recent survey by Circana reveals that while shoppers anticipate spending approximately the same as last year, they express concerns about rising prices, fewer gifts, and the need to hunt for bargains more aggressively this year.
According to Circana, a staggering 80% of consumers expect prices to rise, driven by factors such as tariffs and inflation. As a result, many plan to kick off their shopping earlier in the season and heavily rely on promotional events from major retailers like Amazon, Walmart, and Target. Adobe projects that online sales will reach a record $253 billion this holiday season, illustrating a promising outlook that may not fully reflect the prevailing consumer anxiety.
During the ongoing Prime Day event, Adobe forecasts that consumers will spend about $9 billion, marking a year-over-year growth of 6.2%. Discounts are anticipated to peak at around 17%, signaling retailers’ efforts to entice cautious shoppers. Marshal Cohen, Circana’s chief retail advisor, noted that the unpredictability of consumer sentiment could significantly influence the success of the holiday shopping season. He emphasized that while defiant consumer spending trends have shown resilience thus far, the final results will depend on various factors, including promotional timings and current news events.
The survey indicated that shoppers plan to spend an average of $796 this year on holiday shopping, representing a 3% increase over last year’s intentions. However, 31% of respondents expect that this increase will manifest in fewer gifts. Almost half of those surveyed intend to start their shopping before Thanksgiving, with 24% having already started or even completed their shopping—an increase of 4% from the previous year. The percentage of consumers waiting until December to shop is at its lowest in recent years, just 19%.
Cohen advises marketers to be agile in their strategies to inspire consumers, whether by tapping into pent-up demand for popular items such as clothing, toys, and technology, or appealing to shoppers’ immediate priorities, be it price or convenience. The imposition of tariffs has not only pushed prices higher but has also disrupted inventory management. Many retailers stocked up in anticipation of increased import costs, leading to potential surpluses if demand fails to meet expectations. This scenario could necessitate deep discounts on excess stock, especially as shoppers become more price-sensitive.
Despite the cautious sentiment among consumers, the expectations for a robust season remain optimistic for marketers and retailers alike. Adobe’s predictions suggest that ecommerce spending during the two-month holiday period is poised to exceed $250 billion for the first time, reaching an estimated $253.4 billion—an overall increase of 5.3%. Furthermore, Adobe anticipates that there will be ten separate days of sales exceeding $5 billion, compared to seven last year.
Mobile shopping continues to gain momentum, projected to account for 56.1% of online spending, reflecting an increase of 8.5% from the previous year. For marketers, the upcoming shopping season may be characterized by a tension: the potential for significant revenue juxtaposed with the uncertainty of consumer behavior and spending patterns.
