As the U.S. holiday shopping season kicks off, retailers are ramping up their efforts to capture consumer attention, but the growth in consumer spending is expected to be modest. According to recent studies from firms like Bain & Company and EY-Parthenon, the primary challenge for retailers this year will be addressing the growing price sensitivity of shoppers. Retailers are adjusting their strategies to ensure they meet the needs of cautious consumers who are looking for value-driven deals and more flexibility during their holiday shopping.
Bain & Company forecasts a nominal growth in U.S. holiday retail sales of about 4.0% year-on-year, while EY-Parthenon suggests that, after factoring in inflation, the real-volume growth could end up being close to flat. Despite the anticipated modest growth, there are opportunities for retailers who can effectively cater to the evolving preferences of consumers. According to the studies, key factors influencing consumer behavior include a strong focus on value, the convenience of omnichannel shopping experiences, and clear visibility into inventory availability.
To address these shifting dynamics, leadership teams in the retail sector are adjusting their strategies to focus on early promotions, tighter inventory management, and improved digital shopping experiences. Retailers understand that success this holiday season hinges on offering value that resonates with price-conscious consumers. Therefore, creating compelling offers and deals that highlight savings, while maintaining flexibility for shoppers, will be essential for capturing attention.
From a lifestyle perspective, consumers are starting their holiday shopping earlier than in previous years. Approximately half of the shoppers surveyed indicated they begin looking for deals in October or November, a shift that highlights two important behaviors: the search for value and the desire to secure products before inventory runs out and shipping pressures intensify. This behavior signals that consumers are becoming more strategic, planning their purchases ahead of time to avoid the stress of last-minute shopping.
Retailers who can adjust their strategies to cater to this mindset will have an advantage. Offering early discounts, ensuring inventory clarity, and enhancing the digital shopping experience can help drive customer engagement. In a season where flexibility and deals matter most, the ability to offer a seamless and value-driven shopping experience will be crucial in driving success.
As consumers remain focused on getting the best value for their money, retailers must not only emphasize their offerings’ affordability but also enhance their overall shopping experience, making it easy for consumers to shop across multiple channels—whether online or in-store—while ensuring that they can secure the products they want without delays. This year’s holiday season will be shaped by cautious spending habits, but retailers who can provide transparency, convenience, and clear value will stand the best chance of winning over price-sensitive consumers.
