Report: Gen Z, African Americans Buying Gifts Mostly for Themselves This Holiday

Vital holiday shopping season sales expected to be strong this year

 

With the 2017 holiday shopping season approaching fast, the nation’s largest retail trade group is forecasting jolly sales for traditional retailers and online merchants.

(Image: iStock/Wavebreakmedia)

 

The National Retail Federation is anticipating sales for November and December at $678.75 billion to $682 billion, representing a gain of 3.6% to 4% from last year. The figures exclude sales from automobiles, gasoline, and restaurants.

African Americans More Likely to “Self-Gift”

 

The NRF also analyzes shopping trends from the previous year. If 2016 is any indicator, more African Americans and young people are splurging on themselves this holiday.

Some 2,040 consumers—including African Americans—were polled by the NSF to understand what influences their gifting decisions and their experiences shopping in 2016.

About 71% of consumers overall said they made at least one purchase to treat themselves over the holidays. But it’s particularly popular among younger, Gen Z shoppers (93%), and among African American consumers (84%) according to the data.

Other findings from last year’s shopping trends include:

  • African American consumers tend to start researching holiday gift ideas earlier in the season. Some 63% said they start researching holiday gifts as early as October, versus 54% of consumers overall. However, most shoppers still hold off on making purchases until November or December. Television also tends to be a more influential source of gift inspiration for black consumers during the holidays.
  • Self-gifting—anytime a consumer buys a gift for his or herself—during the holidays has become more popular the last two years. It can be everything from buying a new outfit for a holiday party to taking advantage of seasonal promotions to make a purchase a person has been holding off on.

This year’s shopping projection is even more cheerful for retailers without brick-and-mortar outlets. The forecast includes online and other non-store sales, which NRF projects to climb between 11% and 15%, totaling $137.7 billion to $142.6 billion.

Robust Consumer Confidence, Longer Shopping Season Boost Sales

 

“Our forecast reflects the very realistic steady momentum of the economy and overall strength of the industry,” NRF President and CEO Matthew Shay stated. “Although this year hasn’t been perfect, especially with the recent devastating hurricanes, we believe that a longer shopping season and strong consumer confidence will deliver retailers a strong holiday season.”

An outlook from Deloitte’s Retail and Distribution practice is favorable as well. It expects holiday sales—seasonally adjusted and minus motor vehicles and gasoline—to reach $1.04 to $1.05 trillion between November and January, up 4% to 4.5 % from a year ago.

“Sentiment and spending indicators are firing on all cylinders, but the question is: How will retailers respond given the profound disruption across the industry?” Rod Sides, vice chairman, Deloitte L.L.P. and U.S. Retail and Distribution sector leader,  stated. “The good news is retail is thriving, and it is the proliferation of new, niche retailers that is resulting in share constantly changing hands.”

Further, Deloitte predicts an 18% to 21% gain in e-commerce sales in 2017 versus 2016. E-commerce sales are expected to reach $111 to $114 billion during this year’s holiday season.

Retailers will get some help with Christmas arriving 32 days after Thanksgiving this year, one day more than last year. Christmas also falls on a Monday instead of Sunday, providing people an extra weekend day to wrap up their shopping.

Holiday Shopping Season Key Driver of Annual Sales for Retailers

 

The holiday shopping season is a big deal because consumer spending can make up as much as 30% of a retailer’s annual sales, regardless of the retailer’s size.

The NRF’s outlook is being fueled by some key economic indicators lining up.

“Consumers continue to do the heavy lifting in supporting our economy, and all the fundamentals are aligned for them to continue doing so during the holidays,” NRF Chief Economist Jack Kleinhenz stated. “The combination of job creation, improved wages, tame inflation and an increase in net worth all provide the capacity and the confidence to spend.”