Retailers always approach the holiday shopping season with a mixture of cautious optimism and trepidation. While this year will be no different, at least one market survey suggests American retailers may be able to breathe a small sigh of relief.
That's because American consumers will spend, on average, 17 percent more money than last year. Americans will spend an average of $831 on gifts this holiday season, $121 more than last year, according to the latest American Express Spending & Saving Tracker report.
But consumers will also be shopping smarter, taking advantage of strategies that will save them money. Pre-holiday shopping is expected to increase by 37 percent over last year. That's one reason Walmart is aggressively promoting its layaway program and pitching a "Christmas Price Guarantee."
Under the guarantee, a customer who buys an eligible product at Walmart anytime between November 1 and December 25 and then finds that same product advertised for less at another store is eligible for a Walmart gift card to make up the difference through December 25. Items placed on layaway are also eligible for the program.
Consumers are also bent on finding deals and looking to manage their spending by setting budgets. More than two-thirds of Americans will set a budget for holiday gifts, and nearly half of them expect to stay within budget. During the 2011 holiday season, 58 percent of shoppers will be looking for clearance or sale merchandise, and 51 percent will be clipping coupons or taking advantage of promotions.
"Consumers are savvier than ever, and they have memorized the holiday retail narrative," says Pam Codispoti, executive VP and general manager for Consumer Card Services at American Express. "We're continuing to see consumers employ a range of tactics to stay within budget and, at the same time, maximize their gift-giving potential."
In addition to looking at holiday shopping among the general public, the American Express survey studied two sub-groups: Affluents (minimum household income of $100,000) and Young Professionals (less than 30 years of age with a college degree and a minimum household income of $50,000). While spending among Affluents will rise along with the general population, Young Professionals, i.e. Gen Y shoppers, are expected to slightly decrease their holiday spending. Gen Y shoppers are also more price sensitive than other population segments; in fact, 63 percent of them plan to use their mobile phones to comparison shop in search of the best deal.
The Gen Y statistics could be a reflection of the difficult job market for younger people. Data from the U.S. Census Bureau's American Community Survey indicates employment dropped more than 10 percentage points from 2000 to 2010 among those aged 16 to 29. For those 25 years old or over with a bachelor's degree or higher, more than 13 million are out of the labor force.
The American Express survey of American consumers is somewhat more optimistic than holiday forecasting by global retail growth by consulting firm Kantar Retail, which projects that the growth rate this holiday season will be 2.8 percent in total retail sales, half of last year's 5.6 percent actual growth. But Kantar sees U.S. online sales increasing 13.5 percent during the period.
Visa’s annual Gift Giving Survey, meanwhile, dovetails with Accenture's holiday shopping report released last month, which found that 88% of holiday shoppers plan to spend the same or less this year. Some of Visa's research findings:
• 58% of respondents will set a holiday budget before they begin shopping
• Only 7% of consumers expect to have more to spend this year, while 31% will have less to spend
• 45% still have at least one unopened holiday gift from last year in the back of their closet
• 22% admit to re-gifting at least one of their holiday gifts from last year
• 59% said they would rather receive a network-branded card over a present chosen by a gift-giver (i.e. clothing, an item for the home such as a picture frame or candles, etc.)
Retailers, of course, are ho-ho-hoping that any optimism rings true and that this is a holiday shopping season they can all be jolly about.