Inside the 2024 holiday season

Retail sales during this year’s holiday season are forecast to increase between 2.3% and 3.3% from last year, according to a Deloitte report released Thursday.

Between November and January, consumers are projected to drive between $1.58 trillion to $1.59 trillion in retail sales, Deloitte predicts.

E-commerce sales are expected to grow between 7% and 9% year over year during the upcoming holiday season, generating between $289 billion and $294 billion in online sales, per the report.

Deloitte’s sales growth forecast for this year’s holiday season indicates a slowdown from last year. In 2023, the firm predicted that retail sales would rise between 3.5% and 4.6% compared to the previous year, pushing holiday retail sales to between $1.54 trillion and $1.56 trillion.

Various broader economic factors continue to weigh on consumers’ budgets. Though inflation has slowed, its lingering impact along with rising credit card debt and declining savings will “likely weigh on sales growth this season compared to the previous one,” Akrur Barua, an economist at Deloitte Insights, said in a statement. 

In August, the Consumer Price Index rose 2.5% year over year, according to the Bureau of Labor Statistics figures released this week. Meanwhile, U.S. credit card debt rose $27 billion in Q2 to $1.14 trillion, according to figures from the Federal Reserve Bank of New York’s Center for Microeconomic Data.

Echoing Barua’s sentiment, other research suggests that consumers are pulling back their spending this year. A third of respondents to a recent Bankrate survey said they plan to spend less this holiday season than last year due to inflation and high interest rates. Less than a quarter said they planned to spend more.

In addition to Deloitte’s findings, other research indicates that shoppers, particularly Gen Z consumers, are using their mobile devices to shop for holiday gifts this year. More than half (53%) of online shopping during this year’s holiday season is projected to occur on mobile devices, according to an Adobe Analytics report. Plus, a recent EMarketer report based on Basis Technologies and GWI research found that 42% of Gen Z shoppers said they’re likely to purchase their holiday gifts through social media platforms, a greater proportion than millennials (26%), Gen Xers (15%) and baby boomers (6%) who said the same.

“Our forecast indicates that e-commerce sales will remain strong as consumers continue to take advantage of online deals to maximize their spending,” Michael Jeschke, principal of Deloitte Consulting and retail and consumer products leader, said in a statement. “While this holiday season reflects a return to trend levels of growth, retailers who focus on building loyalty and trust with consumers could be well positioned for success.”

About 43% of Gen Z shoppers plan to spend more for the holidays this year, compared to 37% of millennials, according to a report released by Fiverr. Per Fiverr, Gen Z continues to do much of its holiday gift searching on social platforms.

Through TikTok Shop (34%), influencers' recommendations (25%) and generative AI search (14%), the demographic globally remains largely influenced by what’s trending online for gift choices.

In the U.S., nearly 54% of Gen Z will find gifts on TikTok Shop alone. A third of U.S. respondents will shop for gifts seen on Facebook and Instagram ads, and almost a quarter (24%) of U.S. Gen Zers will make their purchases through influencer recommendations.

As Gen Z looks online for the holidays, brands are continuing to bet on social media as a means to reach younger generations.

Retailers said they are investing more in digital marketing to attract the segment, with 57% of U.S. retailers using social media ads. Globally, nearly 40% of retailers are investing in social media ads, followed by influencer marketing (35%), email marketing (33%), and improved product pages and SEO (29%) as strategies to reach the audience. Nearly 70% of businesses surveyed also said they plan to use AI this holiday season to “level the playing field” against large e-commerce brands and connect with younger shoppers, according to the report.

“With inflation, competition, and staffing shortages intensifying both online and in stores, the insights from our latest research underscore the type of expertise businesses need to stay ahead,” Gali Arnon, chief business officer at Fiverr, said in a statement. “Demand is up for experts with AI skills, digital marketing, and social media to maintain loyal customers and reach new audiences near and far."

EMarketer released a report last month supporting the forecast of the younger generation making holiday purchases on social media. The company found that 42% of Gen Z shoppers are likely to buy gifts via social media this year, higher than any other generation. Across generations, shoppers buying gifts through social media planned to purchase gifts from Instagram (57%), Facebook (56%) and TikTok (43%).

Social media platforms like TikTok and Instagram have incorporated shopping into their apps in recent years in an effort to attract younger generations and the brands they shop at. TikTok Shop launched in the U.S. late last year, adding an e-commerce element to the popular video-streaming app.

Already popular with Generation Alpha, Generation Z and younger millennials alike, TikTok Shop has been investing in its shopping capabilities. The platform hosted hosted various discount days this summer in collaboration with NYX Professional Makeup and L’Oréal Paris, among others. The shopping portion of the platform has continued to expand with a pre-owned luxury segment in the U.K. and its move in the U.S. to begin offering authenticated handbags. Instagram has continued to pursue similar ventures in hopes of attracting the spending power of the customers already on its platform.

With inflation as a factor, Fiverr found that 80% of businesses are offering discounts, compared to 55% in 2023. The report also found that 42% of customers prioritize good deals for their holiday shopping, followed by free shipping (32%), and high-quality products (30%).

Most holiday shoppers (83%) plan to buy themselves a gift this year, up from 76.2% last year, according to JLL’s holiday shopping report. Among the top items shoppers will purchase for themselves are shoes and clothing (50.8%), electronics (47.5%), accessories (39.3%), toys (23.6%) and games (23.5%). 

Shoppers expect to spend $1,261 on gifts, holiday food, decor and experiences this year, up 31.7% from last year, according to the report. Nearly half (46%) of the budget will go to gifts, down from 55% in 2023. 

Roughly 71% of shoppers will shop via two or more channels this holiday season. While 71% of shoppers plan to buy their goods online for home delivery, over half (58.3%) are shopping at physical stores outside of malls, and nearly 60% will shop at physical stores at an enclosed mall, the report said.

As shoppers seek out deals this year, many consumers are starting their seasonal shopping early. Most will start by Halloween, with 65.5% of shoppers between the ages of 30 to 44 beginning by Oct. 31. Younger shoppers, specifically Gen Z, are likely to start during Black Friday weekend, per the report. 

With consumers beginning their holiday shopping early, many large retailers are introducing deals ahead of Black Friday and Cyber Monday. Amazon is launching its Prime Big Deal Days event in early October, with Target and Walmart conducting their own sales events around that time.

JLL’s forecast of higher holiday shopping spend comes as other research predicts holiday shoppers will spend less. A Bankrate report earlier this year said a third of holiday shoppers will spend less given inflation and high interest rates.

But others are predicting an uptick in online and overall U.S. retail sales this season. Adobe predicts that online U.S. retail sales will increase 8.4% year over year between Nov. 1 and Dec. 31 to $240.8 billion. Meanwhile, Deloitte projects that holiday retail sales will rise between 2.3% and 3.3% compared to last year, pushing sales to between $1.58 trillion and $1.59 trillion.

Amazon unveiled a new solution that uses generative artificial intelligence to convert product images into video ads, as detailed in a blog post.   

The video generator, currently in beta, is part of Amazon’s Sponsored Brands campaign suite and available to ad partners at no additional cost. Gellé Frères, the French skin care company, has been testing the offering as it prepares for the Black Friday rush.  

Amazon also announced a new live image capability for its existing image generator feature that allows brands to add flourishes, like steam rising from a coffee cup, to what were previously static pictures. These tools come as large digital platforms go all-in on generative AI to attract more advertising spend.    

Amazon’s new AI-powered video generator aims to broaden access to an upper-funnel channel that can be prohibitively costly to small- and mid-sized retailers. The videos themselves are fairly rudimentary, being based off of product images, but the one-click aspect of the technology, which comes at no extra charge for advertisers using Sponsored Brands, might draw interest. Amazon made the announcements as part of its Accelerate event last week. 

Gellé Frères has already been experimenting with the video generator as holiday marketing campaigns get underway. In a press statement, a spokesperson for the French skin care company said that the solution “significantly reduced the time required to produce a video ad” and has opened the door to video advertising for a wider range of products in its portfolio. 

To use the video generator, a retailer on the Sponsored Brands platform can submit their product page and go to a drop-down menu, selecting “choose an AI-generated video.” The tool will then show several video options to choose from that the brand can edit to their liking. In a demo video, a lavender-scented lotion is fed through the video generator, creating ads that show sprawling fields of the flower. The user then adds additional copy to highlight the product’s qualities. 

Availability of the video generator and live image capability is limited at first, and Amazon will fine-tune the technology based on advertiser feedback. 

The e-commerce giant began ramping up its generative AI offerings for advertisers last fall, when it debuted an AI-powered image generator. Appliance maker Whirlpool leaned on the image generator for its holiday marketing last year with a campaign that drove more than 2 million impressions and a click-through rate of 2%, above category benchmarks. Extending the concept into the video realm is part of Amazon’s efforts to attract more upper-funnel advertising spend.

Other digital platforms, including Meta and Google, have made generative AI a focus, with a pitch around production efficiency and scale. 

Amazon’s ad segment grew revenue 20% year over year in Q2 to $12.77 billion, a figure that missed Wall Street’s estimates and marked a deceleration in growth from prior quarters.  

Joining other major retailers’ fall sales events, Kohl’s is kicking off its holiday shopping deals in October during its “3 Days of Deals” event. Savings will be on thousands of products across home, gifting, fall apparel, footwear, accessories, baby products and other categories, the company announced Friday. 

From Oct. 7 to Oct. 9, the retailer is offering 25% discounts on select purchases with a coupon. Kohl’s will offer discounts on products from brands like Adidas, Nike and Levi’s. 

The company said it is also offering Kohl’s Rewards members free shipping and triple rewards on nearly everything, including Sephora at Kohl’s purchases.

Alongside other major retailers, Kohl’s is rolling out its holiday deals well ahead of Black Friday and Cyber Monday. While Amazon is planning its fall Prime Big Deal Days event for Oct. 8 and Oct. 9, Walmart and Lowe’s also unveiled sales events in October. 

In July, Kohl’s made a similar move with its Summer Cyber Deals, which offered shoppers discounts on home goods, apparel and outdoor toys. That same month, Amazon also held its Prime Day sales event with savings for Prime subscribers, and Target, Walmart and Best Buy followed suit with promotional events.

As Kohl’s promotes its Sephora shop-in-shop offerings, that partnership has driven growth for the company amid its ongoing sales declines. In its second quarter earnings report, the department store reported a 4.2% dip in net sales from last year, and a 5.1 decline in comparable sales. During an earnings call regarding the quarter, CEO Tom Kingsbury noted that 35% of Sephora at Kohl’s shoppers also buy other Kohl’s products, primarily women’s, juniors and accessories. 

Beyond offering customers discounts ahead of the holidays, Kohl’s is reaching out to families with a new brand platform dubbed “Where Families Come First.” The company will release its first campaign “When Life Gets Real, Start Here,” this fall, where it will use realistic family situations to showcase the retailer’s products.

U.S. online retail sales are expected to hit record highs this holiday season, reaching $240.8 billion for the period of Nov. 1 through Dec. 31. That represents an 8.4% increase over last year’s holiday season, according to a report by Adobe Analytics released Wednesday.

Similar to 2023, the firm predicts retailers to offer discounts of up to 30% off listed prices on such categories as electronics and toys. Other steep discounts in line with last year are expected for TVs at 24% and sporting goods at 20% off.

Purchases on mobile devices is expected to jump 12.8% year over year to a record $128.1 billion, representing 53.2% of all online shopping. It marks the second consecutive year that purchasing on a mobile device eclipsed computers.

Consumers are adjusting to inflation and other economic concerns by shopping earlier and mining for discounts, per Adobe.

Like years past, several retailers — including Amazon, Walmart and Target — have already announced holiday sales events beginning in October.

“The holiday shopping season has been reshaped in recent years, where consumers are making purchases earlier, driven by a stream of discounts that has allowed shoppers to manage their budgets in different ways,” Vivek Pandya, lead analyst for Adobe Digital Insights, said in a statement. “These discounting patterns are driving material changes in shopping behavior, with certain consumers now trading up to goods that were previously higher-priced and propelling growth for U.S. retailers.”

Buy now, pay later is increasing again this year, according to Adobe. The report projects that BNPL will be up 11.4% year over year during the holidays to a record $18.5 billion in online spending. According to Adobe, 22% of consumers said that BNPL allowed them to free up cash and 19% said it allowed them to purchase something they couldn’t otherwise afford.

And Cyber Week — the five-day period from Thanksgiving through Cyber Monday — is projected to drive $40.6 billion in online sales, up 7% from last year. Cyber Monday is expected to be the biggest shopping day of the year, with $13.2 billion in online sales, according to Adobe. 

Party City has lowered prices on over 2,000 products ahead of the holiday season. The move has resulted in average savings of approximately 20% across impacted items, the company said in a Tuesday press release.

Party City has reduced prices on tableware, kids' birthday supplies, candy and latex balloons. The company said the move is an effort to make party goods more affordable.

The price cuts began a few months ago and continued into last week with reductions to an additional 500 products on the cusp of “the busiest party hosting time of the year,” the company said.

Party City’s announcement to cut prices on thousands of items comes at a time when consumers are pulling back on discretionary spending.

“Consumers continue to feel pressure on their budgets in an environment of uncertainty, sometimes making joyous occasions feel stressful due to affordability," Litwin said. “We believe our latest price cuts will make celebrating more affordable with new savings available on many of the most frequently purchased items in our stores and online.”

Examples of the deals on offer include a 20-count pack of solid paper lunch plates reduced from $3.50 to $1.49; a 15-piece package of latex balloons cut from $3.80 to $1.49; and a 220-piece bag of mixed candy reduced from $15 to $11.99.

The specialty retailer filed for Chapter 11 early last year and emerged from bankruptcy protection about a year ago, shedding nearly $1 billion in debt, and reorganizing as a privately held company in the process.

Party City at the time attributed its difficulties to the COVID-19 pandemic, which led to the curtailment and cancellation of in-person celebrations and events — key drivers of the company’s core product offering.

But with the emergence and worst of the pandemic now in the past, the company, which describes itself as North America’s largest party goods retailer, has made several moves, including introducing a new store format this spring. The format features two mini birthday shop-in-shop offerings — one for kids and one for general birthday celebrations — that combine relevant party products in one space.

Party City has also brought on new leadership. In August, the company announced the appointment of Barry Litwin as president and CEO. Litwin came with extensive turnaround experience from retailers such as Sears and Office Depot.

The retailer, however, has also undergone a recent restructuring, according to multiple LinkedIn posts from former employees posted over the past week. Employees that formerly held roles including associate category manager, inventory planner and associate buyer posted that their roles had been eliminated. Party City did not immediately respond to multiple requests to confirm or comment on the layoffs or restructuring.

Uber has partnered with Spirit Halloween to offer on-demand delivery service to the retailer’s customers, per a news release.

Uber Eats, Postmates and the Uber app are now all available to Spirit Halloween consumers across the U.S. and Canada looking for fast delivery. The Spirit Halloween catalog is available on Uber for the same price as in-store, per the release.

Uber One members can access free delivery and discounts of up to 5% on all Spirit Halloween orders of at least $35. For all consumers, the companies are offering up to 40% off their next order of at least $50 through Halloween.

The partnership between Uber and Spirit Halloween comes after the specialty retailer opened over 1,500 temporary locations nationwide this season.

"The holiday season officially kicks off this time of year, and households across the country are looking to on-demand delivery to get what's needed — now," Beryl Sanders, director of U.S. grocery and retail partnerships at Uber, said in a statement. "That's one of the reasons we're most excited to bring Spirit Halloween to Uber Eats and our other Uber apps to make costumes and other Halloween must-haves a cinch. As a working mom, I know how crucial that last-minute face paint or mask can be on the morning of the school parade or the hour before trick-or-treating starts, and I'm thrilled we'll be able to meet that demand at Uber."

The move follows a trend of retailers seeking to expand their delivery options and get products to customers faster. In addition to Spirit Halloween, Uber has existing partnerships with Big Lots, Lowe's, Michael's and Party City for on-demand delivery.

Instacart is also offering same-day delivery service with several major retailers, including Kohl’s, Sally Beauty and Costco. And DoorDash in June announced a similar partnership with Academy Sports and Outdoors.

But same-day delivery might not be that important to consumers, according to a Forrester report from December. Three-quarters of U.S. online shoppers said free shipping was the most important factor to them, while just one-fifth listed same-day or next-day delivery as a key factor in choosing which retailer to purchase from.

The announcement for Spirit Halloween to expand its delivery options also comes after the retailer in June announced plans to hire 50,000 seasonal employees. Halloween spending for 2024 is expected to decline this season to $11.6 billion from a record $12.2 billion last year, according to the National Retail Federation.

Citing continued inflation and high interest rates, 33% of consumers say they will spend less this year on holiday shopping than in 2023, per a new report from Bankrate.

Just 24% of shoppers surveyed said they would spend more this holiday season, while 43% will spend about the same. Nearly a quarter of shoppers said that the cost of holiday shopping will stress their budgets. 

The survey of 2,300 U.S. adults found that older generations tend to be more stressed about holiday spending, led by Gen X at 34%, followed by millennials (29%), boomers (25%) and Gen Z (21%).

Bankrate’s recent holiday report indicates how inflation and other macroeconomic factors are putting pressure on consumers’ wallets this season.

"It seems that holiday shoppers will be more frugal this year, as multiple years of high inflation and high interest rates have taken a considerable toll,” Ted Rossman, Bankrate senior industry analyst, said in a statement.

Concern over pricing has holiday shoppers hesitant, yet still planning to spend. Of the 2,300 surveyed by Bankrate, 1,789 responded planning to shop for the holidays this year.

And that shopping may be starting earlier. Almost half of all those surveyed by Bankrate said they would start shopping for the holidays by Halloween.

For the past several years, retailers, including Walmart, Target, Amazon and Best Buy have rolled out October sales events for the holiday season. Amazon last month announced that its big holiday promotion will be back for Prime members this October. 

"While some people scoff that the holiday shopping season seems to start earlier every year, getting off to an early start gives you more time to comparison shop for the best deals and spread out the impact of your purchases,” Rossman said.

E-commerce will be a key channel this season, with 42% of respondents saying most of their holiday purchases would be done online, compared to 23% of shoppers who intend to do most of their holiday shopping in stores, according to Bankrate.

Recent surveys also suggest that more shoppers, most notably Gen Z, will make their holiday purchases using such social media platforms as Instagram, Facebook and TikTok. And a report from Adobe Analytics predicts that more than half of online sales this holiday season will occur on mobile devices.