Square released its Holiday Retail Report, forecasting that this holiday season is not anticipated to deviate considerably from years past. As shoppers are excited to return to physical stores, in-person purchasing is up compared to last year, signaling a return to normal.
More consumers are purchasing gift cards
Supply chain constraints are risking on-time gift arrival, resulting in consumer gift card purchases increasing 43%, with physical gift cards seeing a 46% increase and e-gift cards seeing a 29% increase in purchases. Retailers are already preparing for consumers opting for gift cards instead of physical gifts, as 32% more businesses have sold gift cards this year compared to last.
Sales and promotion trends remain consistent
So far, supply chain and inflation concerns are not causing major changes in sales and promotions applied at retailers this year. The average number has closely followed 2019 and 2020 trends, with no indication that merchants are offering fewer sales. The value of offered sales also hasn’t fluctuated much, with a median promotion of $10 off and median percentage of 20% off.
Other key findings from Square’s Holiday Retail Report include:
- Even though retailers are urging consumers to shop early, Square found no considerable spike in consumer purchasing so far, indicating that holiday shopping is not starting earlier.
- Demand for toys is up 36% and their average price has increased 12%. Laptop sales are up 20% and demand for health and beauty items is up 81%. Meanwhile, jewelry demand has increased by 26% and air purifiers are up 59% in sales, yet the price has dropped 21%.
- As book sales rise, specific industries like manufacturers and distributors of books, magazines, and newspapers experienced an unusually large lift, increasing 40% in gross payment volumes (GPV), compared to a mere 0.5% last year.
- Home supply and warehouse retailers have seen a 32% increase in GPV compared to just 5% last year as consumers look to adorn their homes for the holidays.
“Businesses must find a way to create memorable and seamless shopping experiences during the holidays, further encouraging customers to come back into the New Year,” said Alyssa Henry, Executive Vice President, Square. “Convenience and customization will be key to meet buyer’s needs and expectations this year. These are the moments of truth that really matter and will build sustained brand loyalty and reputation.”