How this holiday shopping season is shaping up for retailers

If you thought good old-fashioned in-store shopping was a thing of the past, think again.

126 million U.S. consumers shopped in-store from Thanksgiving through Cyber Monday this year, according to survey results published on Tuesday by the National Retail Federation (NRF) and Prosper Insights and Analytics. That’s more than the 124 million who shopped online, a group that dropped from 134 million last year.

Even Cyber Monday attracted fewer consumers to retail websites this year than in 2023: 64 million people over this five-day holiday compared to 73 million last year, according to the survey.

That doesn’t exactly mean a sudden retreat from online shopping is taking place. Black Friday remains a popular day for spending money while surfing the web, even more so than Cyber Monday: 87 million Americans shopped online on Black Friday alone, more than the 81.7 million that went to a physical location that day and up from 76 million last year.

Marketers say a deeper dive into the numbers supports a “bricks and clicks” strategy: online and in-store can not only co-exist but also complement one another — especially as more retailers build retail media businesses to grow advertising revenue. Further, the in-store and online experiences for consumers are increasingly blending. Anyone who’s scanned a QR code in store, or couldn’t find what they wanted and checked the store’s app, will understand.

According to a PWC survey, 56% of survey respondents found a store or brand’s app to be the most important in-store digital service during the holidays, topping other conveniences like self-checkout and navigation kiosks.

To drive home the point, eMarketer predicted that physical stores will “rebound” this holiday season, but e-commerce will still grow at its fastest rate since 2021.

“Dedicated apps create a virtuous cycle for retailers: They can improve the in-store customer experience, thus enhancing loyalty, and yield valuable data for retailers that can be used to support their retail media efforts and better personalization,” Sky Canaves, principal retail and e-commerce analyst at eMarketer, tells The Current.

Record sales expected

In total, 197 million total consumers shopped across in-store and online locations this year — slightly lower than the 200 million last year, but still more than any other year prior. In the face of perceived economic headwinds, the main takeaway from the results is that this holiday shopping season is still shaping up to be a healthy one, and “retailers are feeling confident,” according to NRF President and CEO Matthew Shay.

“Consumers have saved, planned and prepared for the holidays,” Shay said during a call with reporters on Tuesday, later adding that “consumers, and the economy, are overall in a good place.”

How good? Let’s get into some actual dollar details, since that’s what really matters during the holidays, right? NRF estimates that holiday spending from Nov. 1 through Dec. 31 could reach record levels of between $979.5 billion and $989 billion. That would be up from the $955 billion spent last year in that timeframe.

Consumers have already spent $131.5 billion from Nov. 1 through Dec. 2 just while online shopping, according to data from Adobe Analytics. And Adobe projects that number to reach a record $241 billion during this holiday season, an 8.4% increase from last year.

Shorter shopping season

So yes, to reiterate: Online shopping is very much alive and well. But any discrepancy in the number of consumers and the number of dollars might come down to who is doing most of the online shopping.

Shay said that higher-income households are more likely to spend online while lower-income households and value-conscious consumers are more likely to shop in-store, particularly discount stores.

There’s also the fact that Thanksgiving arrived later in the month than last year, meaning more people likely bought online earlier as opposed to waiting for the Thanksgiving-to-Cyber-Monday experience. For instance, according to NRF, 38% of shoppers took advantage of early deals in the week leading up to Thanksgiving. The time between Christmas and Thanksgiving is shorter this year than last, and a lot of people probably didn’t want to wait.

If anyone has bought a pumpkin spiced latte in recent years, they know how early the seasonal offerings are getting. The current time of year isn’t immune.

Still, even with the early discounts, Shay said this Thanksgiving weekend “exceeded expectations in terms of the sheer volume of shoppers.”

The abundance of shoppers provides an abundance of opportunities for retailers to reach them across different channels.

“Retailers understand that their omnichannel customers are more valuable than those who shop in a single channel, so they want to expand their opportunities to reach them during the critical holiday season by offering seamless experiences across stores, websites and apps,” Canaves says.