Will consumers favor brick & mortar or online this holiday season?

Coresight Research released its "Holiday 2024: US Consumer Survey and Retail Outlook."

The company conducted a survey of over 3,500 U.S. consumers about their holiday shopping plans to compare spending last year 

The results reveal that total holiday retail sales are expected to grow by 3% year over year and online retail sales to increase by 9% year over year. That’s a decrease in total holiday retail sales compared to 2023, but an increase for online sales.

[Related: Will 2024 holiday season be ho ho or ho hum?]

Key findings:

• More holiday shoppers expect to shop early this year, with 52.3% starting before November—up 8.0 PPTs from 44.3% who reported the same last year. Around three in five consumers expect to find gift ideas at physical retail stores. 
• At least two in five consumers expect to buy the top three categories as gifts this holiday season—apparel, gift vouchers/cards and toys/games. Net 21.1% of consumers overall expect to spend more on apparel (the most popular product category) than they did last year.
• The three traditional leaders in holiday shopping are Walmart, Amazon and Target. At least one-third of holiday shoppers plan to shop at each of these retailers. 52.8% of shoppers plan to shop at Walmart, 50.2% at Amazon, 34.1% at Target. The other most popular retailers that consumers plan to shop are TJX (22.8%), Best Buy (17.3%), Dollar General (17%).
•  Overall, net 2.8% of consumers expect to spend more this holiday season than they did last year, with expectations to spend more driven by high-income consumers. 
•  In net terms, more consumers expect to increase their spending on products this year than reported the same of their service spending—a difference of 4.6 PPTs.

[Read more: Despite slowing economic growth, shoppers continue spending]

• Debit and credit cards are the most popular payment methods, each expected to be used by around half of consumers for holiday shopping. Overall, 85.1% of consumers expect to use credit/borrowing to make holiday purchases, and just over two in five consumers expect to put more than 50% of holiday spending share on credit. 
• Consumers are price-conscious and seeking value: Deals and discounts and product base prices rank as the two most influential factors overall for holiday shoppers when choosing a retailer to buy gifts from.
• One-quarter of consumers plan to use social media for ideas this holiday season—though this is down 9.7 PPTs from last year. Just over one in 10 consumers plan to use livestreaming e-commerce for holiday shopping this season.
• Three-quarters of consumers expect to buy gifts in-store, while four in five expect to buy gifts online.
• Debit and credit cards are the most popular payment methods, each expected to be used by around half of consumers for holiday shopping. Overall, 85.1% of consumers expect to use credit/borrowing to make holiday purchases, and just over two in five consumers expect to put more than 50% of holiday spending share on credit.
•  Cards (debit and credit) are popular payment methods across income brackets and generations but are most dominant among older, higher-income consumers.

Coresights analysis:

• Our survey suggests consumers will be buying early, looking for deals, shopping online and spending on credit this holiday season. 
• More shoppers expect to purchase in October and fewer in November than last year, and we note the tailwinds provided to this trend by early promotional events from Amazon and others.
• Consumers are spending cautiously and our survey shows a net majority of consumers with lower household incomes expect to spend less than last year. Deals and discounts are by far the most important factors when consumers are deciding where to make purchases. 
• Credit also looks likely to support a positive expansion in sales, given that a large majority expect to lean on borrowing and four in 10 of those expect to put at least half of their spending on credit— this is in the context of recent meaningful increases in credit card borrowing. We expect that growth will again be focused on e-commerce sales, which we anticipate will grow at 3X the rate of overall retail sales this holiday season. We expect shopping events, including those in October, to support this e-commerce expansion.