Holiday Spending Fuels the Economy
Holiday sales are expected to rise to an estimated $720.9 billion this year, growing roughly 4.8 percent from 2017.
The consumer drives the U.S. economic engine and at no time is that more apparent than during the holiday season. Consumer spending accounts for roughly 69 percent of total economic activity in the U.S., and holiday shopping is a significant contributor to that growth. From cashiers to servers, the retail and food service industries are the connection from producers to consumers, combining to employ 28 million Americans, and accounting for 1 in 5 jobs. As the holiday season gets underway, hundreds of thousands more retail jobs will be added and consumers will flock to stores looking for a deal. According to the National Retail Federation (NRF), consumers are projected to spend roughly $720 billion dollars throughout November and December. Thanksgiving weekend, which includes Black Friday, Small Business Saturday, and Cyber Monday, has already proven to be a success, with nearly 165 million Americans shopping either in-store, online, or both. The NRF estimates that shoppers spent an average of $313.29 over the holiday weekend and is projecting consumers still have 56 percent of their shopping left to do.
What's Driving the Holiday Sales?
The U.S. economy, by many accounts, is running at full steam. The unemployment rate is at 3.7 percent – a 49-year low, consumer confidence remains at historically high levels, wage growth is growing at the fastest pace since 2009, and gas prices have fallen. With the strong state of the economy, many shoppers are feeling positive about their current situation and confident about the future.
The Shift to Online Shopping
One thing is clear, more shoppers are making their purchases online. Adobe Analytics recorded the highest level ever of online shopping on Cyber Monday at $7.9 billion, and reports by the National Retail Federation indicate that 41.4 million Americans shopped online only over the Thanksgiving weekend, versus 34.7 million who shopped instore only, with the majority of consumers shopping both online and in-store. Adobe also reported that shopping via mobile device broke all-time records of $2 billion in sales on Cyber Monday. The shift from the showroom floor to the website could have big implications for the retail industry in the years to come, and retailers of all types will need to adapt to the new marketplace to keep shoppers engaged.