PURCHASE, N.Y.—With gas prices remaining low and consumer optimism high, a new forecast calls for U.S. retail sales growth of 4.0% for the upcoming holiday season compared to 2014.
Three-quarters of respondents in a recent MasterCard survey said they are as confident or more this year than last year, and the majority plan to pay for their holiday spending with money they have on hand, instead of through long-term borrowing. MasterCard SpendingPulse survey also reveals that consumers are increasingly spending on experiences, with record spend on travel and restaurants in 2015.
While 80% of global purchases are now informed by a digital device and 60% of consumers report doing more research online than in the past, e-commerce still represents just a slice of overall retail sales,” MasterCard stated.
However, more shopping happens online during the holidays than the rest of the year. And during the 2014 holiday period, nearly 8% of sales occurred online, compared to 6.3% for the full year, the company said.
Consumers are more likely to buy certain products online, though; roughly half of electronics and appliances sales and a quarter of apparel sales are through e-commerce. Online purchases of apparel grew 11.8% last holiday season compared to 2013, while in-store sales were essentially flat.
While Black Friday remains the biggest spending day of the holiday season, its dominance has waned in recent years as more retailers open up or extend their hours on Thanksgiving Day, MasterCard noted. “Black Friday sales were down 1.6% last year compared to 2013. When looking at Thursday through Sunday of Thanksgiving weekend last year, however, sales were up 0.9%. Thanksgiving drove some of that with sales up 3.3%.”
“Dueling discount days are causing consumers to diversify when they spend, but retailers have seen their strategies pay off,” said Sarah Quinlan, SVP, market Insights for MasterCard Advisors. “Bigger question marks surround e-commerce, which remains relatively low except for certain categories. We’re also seeing consumers putting their money where their mouth is—literally—as consumers put more of their discretionary dollars toward eating out.”