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Experts Break Down What Consumers Will Be Buying This Week

Apparel and gift cards top consumers’ purchasing priorities this holiday, as many believe Black Friday is losing its lusters and plan to finish their shopping early in the peak season.

Some 25 percent of consumers intend to wrap up their holiday shopping earlier in the season than usual, according to a Goldman Sachs retail study. Black Friday will complete the shopping extravaganza for another 25 percent, and 55 percent eye the first week of December for when they’ll “put a bow on it,” the study found. Consumers indicate a pronounced interest in purchasing home goods and gift cards, which will hoover up 45 percent of all holiday spending, Blackhawk Network, a branded payments providers, found in a 10-country consumer survey including the U.S., U.K., Australia, France and India.

“This year more than ever, consumers’ holiday shopping plans will differ from country to country. As pandemic hotspots shift around the world, some people will have relatively familiar holiday shopping experiences while others will continue to keep their distance,” said Theresa McEndree, Blackhawk’s global head of marketing & corporate brand.

“This holiday season is going to be uniquely unpredictable for retailers and consumers alike. However, according to our research, one trend that looks to remain consistent across the globe is using gift cards as a universal gifting language,” she added. “Merchants and shoppers need to be prepared to react and adapt to this year’s challenges and gift cards offer the unique flexibility to do just that.”

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Meanwhile, Goldman analysts expect strong casual and athleisure apparel sales this season. While male survey takers noted plans to spend on athletic shoes and clothes, denim and loungewear were standouts among female respondents. Dresses, handbags and accessories could underperform this season, Goldman added.

A Pitney Bowes survey further cosigned the strong outlook for gift cards, with nearly one-third of consumers planning a purchase in this area. “Those waiting until the last minute to shop are likely to be impacted most by inventory shortages and shipping delays and will probably also turn to gift cards to finish their shopping. That means the holiday shopping and shipping season could last well into January as consumers use those gift cards,” said Vijay Ramachandran, Pitney Bowes’ vice president, market strategy for global e-commerce. Amazon, Walmart and Target rank No. 1 for gift card popularity and spending, with an average spend of $56.90, edging out apparel and footwear at $51.05.

Though brick-and-mortar’s place in retail is evolving, the store is still highly relevant to the shopping experience.

And the big question surrounding Black Friday is how important it will be compared with traditional years’ past, said Ethan Chernofsky, vice president of marketing for Placer.ai, a consumer foot traffic data firm.

“It was this massive singular day, and there’s a real feeling that it’s changed. That doesn’t mean it will happen overnight, but we believe Black Friday is going to dissipate over time,” he said.

Although e-commerce continues to gain market share, digital sales remain a much smaller component of retail.

“What we’ve learned last year is that it’s not just about prices. It’s about having products [people want], and having the right kind of shopping experience,” Chernofsky said, adding that e-commerce can’t replicate the upper hand brick-and-mortar has with product discovery.

And this season consumers might gravitate to the breadth of options a shopping mall offers, where they can potentially find backups and alternatives if the item they want is unavailable in any given store. Chernofsky expects home products to perform well, and sees a bustling December for off-price retailers after shoppers pick through department stores.

Experts have strong if varying outlooks for the season’s total tally. Sales could jump 10 percent to 13 percent over 2019, according to global consulting firm AlixPartners—amounting to the strongest holiday since 1999. The National Retail Federation pegs holiday sales growth at a more modest but still robust 8.5 percent to 10.5 percent to between $843.4 billion and $859 billion, above last year’s $777.3 billion haul.

“Our message to retailers is: ‘This holiday season is yours to lose,’” said Joel Bines, a managing director and the global co-leader of the retail practice at AlixPartners. “There’s unprecedented pent-up demand out there and consumers have lots of money in their pockets.”

NRF expects nearly two million more people to shop Thanksgiving Day through Cyber Monday versus last year. “Black Friday stopped being a one-day event years ago, and this year some consumers started shopping for Christmas as early as Halloween,” said Matthew Shay, NRF president and CEO.

A full 66 percent of consumers plan to shop Thanksgiving weekend this year, according to NRF and Prosper Insights & Analytics’ survey of 7,837 adults. That’s an estimated 158.3 million people, up from 156.6 million last year, but still below the 165.3 million in 2019. And among those shopping on Thanksgiving Day, 65 percent are likely to shop in stores, up from 50 percent last year. For Black Friday, 64 percent said they plan to shop in stores, up from 51 percent in 2020. Apparel topped the list of items to buy, with 53 percent citing the category as their top gift item. That’s followed by the 46 percent who plan on giving gift cards this year, the NRF survey found.

Brands also are working hard to make sure they have sufficient stock and the right product. “We have been working very closely with our workshop partners in Italy, our freight forwarders, and fulfillment centers to ensure we are in a good inventory position for the upcoming holidays,” said Maria Gangemi, co-founder and chief merchant of direct-to-consumer shoe brand M.Gemi. “We are not having the same issues that others are having from the Far East. Being 100 percent made in Italy allows us to continue to deliver newness each week.”

Rising inflation could encourage shoppers to focus on deals and discounts, according to ICSC’s 2021 Thanksgiving Weekend Intentions Consumer Survey fielded Nov. 12-14.

Sixty-six percent of the 1,015 respondents believe Black Friday has lost some of its urgency in recent years, citing early-season promotions as reducing the pressure to concentrate their shopping on one big day. Noting inflation’s effect on goods and services, 61 percent said that deals and promotions would be more important this year over holiday weekend. Also, 52 percent said they plan to shop in stores or use click and collect to make sure they get what they want and avoid shipping delays and disasters.

Digital payment software firm ACI Worldwide projects a 98 percent increase in e-commerce transactions through buy online, pick up in store (BOPIS) over the holiday season, while a Deloitte study indicates that BOPIS and curbside pickup this year will surpass usage rates prior to Covid.

Additional reporting by Jessica Binns.