With A Projected 3.2% Holiday Retail Spending Bump, Which Advertisers Will Benefit?

Things are looking up for holiday season retail sales again this year, according to the Mastercard Economics Institute, which expects a 3.2% year-over-year lift in retail spending — excluding automotive sales — compared to 2023’s 3.1% sales increase during the period from Nov. 1-Dec. 24.

Mastercard’s forecast, based on its U.S. SpendingPulse insights measuring in-store and online retail sales across all types of payments and macroeconomic trends, suggests four key trends impacting spending this season, of which radio ad execs and advertisers may want to take note.

Right up top, a later-than-usual Black Friday this year, on Nov. 29 vs. 2023’s Nov. 24, may result in more holiday shopping in December vs. a year earlier, including a bigger boost for online. That may especially impact clothing sales, which have gradually shifted to online. The report forecasts a 4.5% increase in online clothes spending from last year’s holiday retail season, while in-store clothes shopping is expected to be up 2%.

“The separation between online and in-store shopping has been blurring for years,” Mastercard’s report says, “but consumers are increasingly opting to make their purchases online, often waiting for online promotional periods.”

Clothing is one category that might benefit from the Federal Reserve’s recent interest rate, along with sporting goods, personal care products, and especially electronics, where prices are relatively the same from a year ago. “Lower borrowing costs could lead consumers to splurge on high-tech gadgets,” the report says. “It also may be time to replace the gadgets we invested in during the pandemic, leading to an estimated electronics sales increase of 6.7% year over year.”

Another area where Mastercard’s analysis sees more spending is with jewelry retailers, particularly from millennials and Gen Zs, whose transaction share has grown from 38% in 2022 to 44%, the report says. “A deep dive into top jewelry retailers by number of transactions shows that spending on brands favored by millennial and Gen Z shoppers is outpacing traditional brands, which are typically more expensive.”