If you’re planning your holiday shopping budget, you may want to set aside a little more than you did last year. In fact, that’s what most people will be doing, according to new research that revealed consumers expect to spend, on average, 4% more this year than they did last year.
Each year, the National Retail Federation (NRF), a trade association for the retail industry, offers a preview of the holiday shopping season with projections of how much consumers will spend and what they will spend their money on. This year’s survey, conducted jointly by the NRF and market research firm Prosper Insights & Analytics, was given to 7,782 consumers between Oct. 1-10.
According to the results, consumers say they expect to spend an average of $1,047.83 over the holiday shopping season. That’s more than consumers expected to spend last year when they projected they would spend $1,007.24. Collectively, consumers are expected to spend between $727.9 billion and $730.7 billion.
The biggest spenders this year are expected to be shoppers between the ages of 35 and 44, with this group saying they plan to spend an average of $1,158.63.
What will shoppers be spending that money on? Respondents said they expect to spend approximately $658.55 on gifts for friends, family and coworkers; about $227.26 on seasonal items like food, decorations and greeting cards; and another $162.02 on other non-gift purchases related to the holidays.
Younger consumers were particularly likely to expand their gift recipient lists beyond family, with 52% of shoppers between the ages of 25 and 34 planning to buy gifts for coworkers and 82% of shoppers between 18 and 24 planning to buy gifts for friends.
Gift cards are expected to be the most popular gift item, with 59% of respondents requesting them, followed by:
- Clothing and accessories (52%)
- Books/movies/music/video games (35%)
- Electronics (29%)
A majority of consumers — 56% — said they would shop online during the holiday season. Among online shoppers, an overwhelming 92% plan to use free shipping services while 48% said they will buy items online and pick them up in the store. Another 16% expect to utilize same-day delivery services, which could facilitate last-minute purchases.
Brick-and-mortar stores will also see their share of business, with 53% of respondents saying they will shop in department stores and 51% planning to shop in discount stores. Other shopping venues that respondents expect to frequent during the holiday season include:
- Grocery stores (44%)
- Clothing and accessory stores (34%)
- Electronics stores (23%)
- Local small businesses (23%)
If you know you’re going to be spending extra money this holiday season, don’t wait until the last minute to begin planning. The last thing you want is to start off the new year with holiday shopping debt. Start thinking about your budget now and begin to set extra money aside. Planning your shopping strategically also gives you the opportunity to take advantage of credit card rewards to cash in on. Finally, stay on the lookout for holiday scams that target shoppers over the next few months.