November 2023Retail PracticeHoliday shopping in 2023: ‘It started early and will end late’In search of the best deals, US consumers are spreading out their spending across several months this holiday season. Here’s what that means for retailers.Across the United States, consumers are continuing to spend, but they’re not opening their wallets too wide. Retailers that offer personalized promotions, same-day delivery, and “buy now, pay later” plans are more likely to capture cautious consumers’ holiday spending. Learn more about US consumers’ holiday shopping behaviors and expectations on this episode of the McKinsey on Consumer and Retail podcast, hosted by Monica Toriello. The following is an edited transcript of the conversation. Monica Toriello: It’s November. By now, about half of US consumers have already started their holiday shopping. That’s our topic for today: holiday shopping in 2023. Our two guests will talk about the findings from two ConsumerWise surveys they conducted recently—one in September and the other in October—that have yielded valuable information about how US consumers are feeling, how and when they plan to spend over the holidays, and what it all means for retailers. Let’s meet our guests.Colleen Baum is a partner in McKinsey’s New York office. She advises retailers and apparel brands on a wide range of topics, including growth strategy, store footprint and format innovation, merchandise planning, inventory management, and omnichannel fulfillment. She also leads McKinsey’s retail real estate work in North America.Tamara Charm is a partner in the Boston office. She helps companies drive growth and innovation by applying a deep understanding of consumer sentiment and behavior. She gets into the “why”—the motivations behind consumers’ actions—and advises companies on how they can meet consumers’ needs. Glad to have you both with us.Last year, around this same time, the two of you coauthored an article about the 2022 US holiday shopping season. What’s different this year?Tamara Charm: One difference is that consumers are very much in a trade-down mood. They were trading down last year, but this year they’re doing so even more. The average consumer is in pretty decent financial shape, but there’s more pessimism. Consumers are trading down because they’re worried about what might come next.A second difference is that consumers—rather than rushing to the shelves, to their phones, or to websites to buy something before everything runs out—are instead lengthening the holiday season. Their number-one concern is, “When can I get the items that I want at the best price possible?” Some consumers are saying, “I will shop earlier, because I think I’ll get things at better prices earlier,” while others are saying, “I will shop later, because I think that’s when the best deals will be.” That is...
