As inflation slowly comes down, consumers are adjusting to the changing economy. Our highly-experienced iBestTravel team will keep you abreast of the latest developments and forecasts. Here’s the latest…
A raft of big online sales events just ended. What do they say about consumer sentiment and how people are likely to shop for the holidays? Shoppers are still willing and able to spend, based on the results of Amazon’s Prime Day and competing online sales promotions by Walmart, Target, Costco, and Best Buy held earlier this month.
Current Consumer Spending Trends
Overall, retail sales were up 6.1% during these events—a solid showing, though slightly slower growth than what those retailers logged the year before. However, shoppers were clearly more cautious in their spending. While total sales increased, the average purchase price decreased, indicating a more thoughtful approach to shopping.
Changes in Shopping Behavior
Electronics sales, which usually perform well during online promotions, were surpassed by appliances and home goods. This suggests that consumers are prioritizing essential needs over discretionary spending. Notably, 50% of shoppers compared prices across different online platforms before making a purchase, and an increasing number utilized buy now, pay later options. This trend reflects a shift in buying strategies—many consumers seem to be postponing planned purchases in anticipation of sales events.
Value-Conscious Consumer Mindset
These trends suggest that consumers are doing well, yet are more value-conscious than they were six months or a year ago. Many individuals still have extra savings accumulated during the pandemic, and the job outlook remains strong. Nevertheless, inflation has taken its toll. Customers are increasingly careful about their spending, actively seeking out deals and reconsidering their purchases—a mentality likely to persist for some time.
Looking Ahead: Back-to-School and Holiday Seasons
The back-to-school shopping season appears to be on track to perform at least as well as 2022, as 55% of consumers are already shopping for school-related items, although 85% indicate they are not finished. Additionally, back-to-college spending is expected to rise substantially as college students prepare to purchase laptops and other essential devices.
Nonetheless, the holiday outlook is less optimistic. A modest sales increase is anticipated, mirroring last year’s performance, with online sales expected to grow by a robust 10%, while in-store sales may only increase by 2%.
Technology and Consumer Engagement
Other notable findings from the midsummer sales events for retailers include the growing prevalence of mobile shopping. Nearly half of consumers utilized mobile devices during the Prime Day events, opting for smartphones and tablets over traditional desktops or laptops. As mobile shopping becomes more user-friendly, having a mobile-optimized website is essential for retailers.
Moreover, online promotions often pull sales forward. For instance, the upcoming Prime Day event by Amazon is predicted to capture sales typically made after Thanksgiving. Participating vendors reported that more than half of their customers had not shopped with them in the prior year, highlighting the potential for online sales to attract a new customer base. Despite elevated advertising costs, the resultant sales volume can offset these expenditures.
This forecast first appeared in iBestTravel, a publication dedicated to delivering concise insights into business and economic trends. Stay informed about future developments that could affect your investments and financial strategies.
David is both staff economist and reporter for iBestTravel, overseeing economic forecasts. He has extensive experience in forecasting GDP and its components, consistently outperforming industry benchmarks. David holds two master’s degrees and is ABD in economics from the University of North Carolina at Chapel Hill.
