The National Retail Federation estimates that holiday sales will increase 4.1% this year or to a total of $616.9 billion. This includes in-store, direct-to-consumer, kiosk and online sales. If this number is correct, the 2014 shopping season could be the best one that retailers have seen in over a decade.
With the number of stores open on Thanksgiving Day increasing, the number of shoppers coming out early to get deals has also increased. NRF data estimates that 44.8 million consumers shopped on Thanksgiving Day in 2013. This number is up by 27% from the previous year and millennials represent more than 43% of that number. Millennials spent 13% more than the other generations over Thanksgiving weekend. 83% also shopped for themselves over Thanksgiving weekend.
A recent study from Hanover research reveals that that millennials live and shop in the moment, often making purchases and dealing with the repercussions later. The study also shows that 52% of Millennials were more likely to make impulse purchases than any other generation. They prefer to purchase with digital media in hand and they don’t stop spending in a recession-only 20 percent of Millennials reported spending less on apparel during the most recent economic downturn.
Several factors which should increase spending this year include:
Weather– Last Fall and Winter, much of the US was experiencing bad weather during the shopping season. Although part of the Eastern United States currently is buried in snow, the majority of the States are experiencing mild weather.
Utility Spending– Due to a mild summer, many consumers spent less on utilities and have more money for spending.
Government Shut-Down- On October 1, 2013, a partial government shut-down was put in place. The 16-day-long shutdown was the third-longest government shutdown in the U.S. and 2.9 million people were put on job furlough.
Employment Rates– More people are employed this year and disposable income increased 4% each month this summer.
Consumer Confidence– Most surveys are showing that confidence on the part of consumers has improved.
Gasoline Prices– In the past couple of months, gasoline prices have dropped and may provide more spending money for the holidays.
Gen Xers are knowledgeable shoppers who use information to guide their decisions and Baby Boomers tend to purchase based on practicality. These generations will likely keep budget more in mind this holiday season.