The National Retail Federation Thinks Consumer Spending Will Be Flat This Holiday Season According To Consultant Susan McGalla

Retailers live for the holiday season. It’s the time of the year when retailers put money in the bank because of the shopping surge that usually occurs from October through December. But according to a consumer report conducted by the National Retail Federation, the average spending per person this year will increase about .04 percent over last year. Consumers spent on average about $802 last year, and based on the FRA report they will spend an average of $806 this year. That’s not good news for retailers. Susan McGalla is well versed in the trials and tribulations of holiday shopping. As president of the Pittsburgh-based retailer American Eagle Outfitters, McGalla had to make sure that the chain would do better than the year before for the same time period each and every year. If sales were weak during the last three months of the year, the chain was faced with inventory issues as well as operational adjustments. In short, the holiday selling season can be the difference between keeping a job or looking for another job for hundreds of retail executives. Consumer research projects don’t always produce the results that the researchers identify, according to McGalla. McGalla said consumer intention often differ from their behavior at any particular moment. The recent forecast is holiday sales will be around $630 billion which is a 3.7 percent increase over last year, and online sales would be $108 billion, or 17 percent of the total sales. The 3.7 percent increase was based on several economic factors, and as McGalla points out those factors are always in motion, so nothing is set in stone. McGalla also said that based on the projected figures retailers will be offering lower prices, buying incentives and price matching as well as free shipping. The buy online and pick up in-store offer will be another incentive along with other exclusive incentives. McGalla thinks this season will be interesting because almost half of the shopping will be done online and a lot of consumers will take advantage of the ship to the nearest store offer. Over 90 percent of the shoppers want free shipping, and McGalla says they will get it this year. Mobile buying will also play a role in holiday shopping this year. Over 21 percent of smartphone owners will buy products from their phone. Almost 40 percent of smartphone owners will do the research on their phones, and they will also connect with retailers that have the products they want to buy. One in five smartphone owner will check product availability on their phones, according to McGalla. Ultimately, shoppers could spend more than the NRF survey projects, but some analysts think the numbers that the NRF are projecting are accurate based on the fact that holiday spending has already started. More than 40 percent of holiday shoppers start shopping in October and another 42 percent shop in November. McGalla said shoppers shop early to avoid crowds, to spread their budget over three months instead of one, and 48 percent of those shoppers want to avoid the stress of last-minute shopping.