2024 Holiday Retail Forecast: Insights from BCG and Deloitte Reports

Introduction

The 2024 holiday shopping season is projected to exhibit modest growth, with key insights suggesting both opportunities and challenges for retailers. Analysis from Boston Consulting Group (BCG) and Deloitte highlights consumer spending trends, the impact of economic factors, and strategic considerations for maximizing sales during this critical period.

Consumer Spending Trends

BCG predicts that consumer spending during the holiday season will be stable, with 28% of consumers planning to spend more than last year, 27% planning to spend less, and 45% expecting to spend the same. Despite strong economic indicators like job and income growth, consumer sentiment is dampened by ongoing geopolitical tensions, global military conflicts, and the upcoming presidential election, which create a mixed spending outlook.

Inflation, although cooling, has led to increased prices for consumer staples, prompting consumers to be more intentional in their spending choices and seek out deals more aggressively.

Shopping Dynamics and Strategies

The holiday shopping season faces a compressed timeline this year due to a late Thanksgiving, reducing the number of shopping days between Thanksgiving and Christmas. This shift necessitates a strategic focus on the weeks leading up to Black Friday and Cyber Monday, identified by BCG as “must-win” periods for retailers.

E-commerce continues to play a significant role, with Deloitte forecasting a 7% to 9% growth in online sales. The importance of weekdays in holiday shopping has been emphasized, with e-commerce becoming a primary channel for many consumers during these days.

Economic and Market Factors

Both reports acknowledge the role of the economic environment in shaping holiday spending. Deloitte notes a slow increase in holiday sales, expecting a total increase of 2.3% to 3.3%, with the labor market and disposable income levels supporting consumer spending. However, inflation presents a dual challenge, potentially dampening the nominal rise in sales while also enhancing purchasing power due to its decline.

Retailer Strategies

Retailers are advised to adopt multifaceted strategies throughout the season. Early promotions and responsive approaches during peak December shopping days are recommended. Building consumer loyalty and trust is also highlighted as crucial for long-term success.

Conclusion

Overall, the 2024 holiday season is set to be dynamic, with economic, political, and market factors all playing significant roles in shaping consumer behavior. Retailers who adapt quickly to the changing landscape, focusing on strategic promotion timing and leveraging e-commerce, are likely to perform best.