As the holiday season approaches, U.S. shoppers are ready to splash out, blending digital ease with traditional store visits.This year, holiday spending is expected to hit a staggering $1,638 per shopper—a 7% jump from last year and 15% higher than in 2022, according to PricewaterhouseCoopers (PwC). Despite 59% of consumers feeling the pinch from inflation and 57% reporting tight finances, the festive spirit is driving spending habits to new heights.
PwC’s latest report highlights that while online shopping continues to thrive, brick-and-mortar stores are staging a notable comeback. Specifically, 45% of consumers plan to make in-store purchases during the winter holidays, marking a 2% increase from the previous year and the highest since 2019.
In-Store Shopping Gains Momentum
In-person shopping is gaining traction, yet it’s not reaching the levels seen a decade ago. Predictions indicate a 14% drop from ten years back. Still, there’s excitement around Black Friday, with 22% of shoppers intending to hit the stores the day after Thanksgiving—a 3% rise from 2023 and the first uptick since 2018. Although still far from the 60% participation rate of a decade ago, it shows a promising shift back to physical retail.
Kelly Pedersen, PwC’s global retail leader, notes that concerns over timely online deliveries are pushing more people into stores. “I wouldn’t be surprised if the in-store traffic this holiday season is a pretty big boon,” Pedersen remarked. Shoppers are eager to experience the immediacy and assurance that in-person shopping provides.
Online Shopping Dominates with Massive Growth
Despite the resurgence of in-store shopping, online retail remains the heavyweight champion. Adobe Analytics forecasts that U.S. consumers will spend a record $240.8 billion online this holiday season, an 8.4% increase from last year. To put it in perspective, 2023 saw online spending reach $221.8 billion, up nearly 5% from 2022.
Key Online Shopping Trends:
- Early Shopping Starts: Shoppers are beginning their holiday purchases sooner than ever.
- Mobile Over Desktop: Over 52% of online transactions will be conducted via smartphones, a record high.
- Discounts Drive Decisions: Retail discounts are a major factor influencing where consumers spend their money.
Vivek Pandya, Adobe Digital Insights lead analyst, explains, “These discounting patterns are driving material changes in shopping behavior, with certain consumers now trading up to goods that were previously higher-priced and propelling growth for U.S. retailers.”
Shopping is More Than Just Buying
Tamara Masters, a marketing professor at the University of Utah, emphasizes that shopping is about more than just the transaction. “When we are purchasing things, it isn’t just about buying the goods, but buying the benefit,” she shared in a Deseret News interview. The emotional connection and the joy of the shopping experience play significant roles in consumer decisions.
Masters highlights that successful retailers are tapping into experiential marketing, creating memorable interactions that go beyond the product itself. This holiday season, many are leveraging nostalgia and creating environments that evoke happy memories.
Creating Memorable In-Store Experiences
Consumers crave positive interactions and uplifting environments during their shopping trips. Winter holidays offer the perfect backdrop for retailers to enhance the in-store experience with:
- Festive Decorations and Lights: Creating a warm, inviting atmosphere.
- Seasonal Music: Setting the mood with holiday tunes.
- Interactive Displays: Engaging customers with hands-on product experiences.
Masters points out, “Individuals are always trying to find a happy place, feel more fulfilled, be emotionally rewarded.” This emotional fulfillment is a key driver for in-store shopping, making the experience more satisfying than a simple online purchase.
Amazon’s Virtual Holiday Shop: Bridging the Gap
While in-store shopping thrives, online giants like Amazon are innovating to capture the magic of physical stores. Amazon recently launched its Virtual Holiday Shop, featuring seasonal decorations and holiday music to create an immersive 3D shopping environment. Shoppers can explore virtual shelves stocked with a wide range of products from electronics to personal care items.
| Feature | Description |
|---|---|
| 3D Store Environment | Navigate through different views with a realistic setup. |
| Brand Showrooms | Explore virtual showrooms for brands like Lego and Disney. |
| Interactive Elements | Engage with products in a dynamic, user-friendly interface. |
Carmen Nestares Pleguezuelo, Amazon’s VP of North America marketing and Prime Tech, stated, “With the Virtual Holiday Shop, we are excited to transport shoppers into a new immersive experience where they can browse over 300 of the most coveted gifts and toys of the season.”
Downtown Alliance’s Push for In-Person Engagement
In Salt Lake City, the Downtown Alliance is boosting the in-person shopping experience with a variety of events and attractions. Last year, downtown traffic grew by 11%, reaching 20.2 million visits. This year, new initiatives like the GLOW light sculpture installation at Gallivan aim to draw more visitors.
Brewer, the Downtown Alliance’s executive director, notes that Salt Lake City is becoming a regional hotspot, attracting shoppers from across Utah and neighboring states. The addition of live events, such as hockey games, concerts, and ballet performances, enhances the overall shopping experience, making it more than just a place to buy gifts.
“Decorations and lights … music that takes you back to non-stressful times,” Brewer explained. “Caring for others and sharing with them, that altruistic part of it that just feels good when it’s connected with the holiday and childhood memories of being happy and carefree … people love to capture those.”
The Downtown Alliance’s efforts ensure that visitors have plenty of reasons to explore and enjoy the heart of Salt Lake City, blending shopping with memorable experiences.
