Ready or not, the holiday shopping season is fast approaching, and new insights reveal how consumers are preparing for their seasonal purchases. As we look ahead to the Cyber 5 period—from Thanksgiving through Cyber Monday—data from the National Retail Federation (NRF) offers a detailed glimpse into consumer behavior, spending trends, and gift preferences for this year’s holiday season.

According to the NRF’s latest gift and toy survey, shoppers are projected to spend an average of $902 this holiday season, marking a new record. Out of this amount, $641 will be dedicated to gifts, while the remaining budget will cover decorations, food, and other seasonal necessities. This surge in spending signals robust consumer confidence and highlights the importance of this shopping period for retailers.

Clothing Takes Center Stage

Unsurprisingly, clothing remains the top gift category, with 54% of consumers planning to purchase apparel this holiday. This trend mirrors last year’s findings, where 56% of shoppers also opted for clothing. Gift cards hold strong at 44%, while 36% of consumers are inclined towards toys, with popular brands like Lego and Barbie leading the charge. The remaining top categories include books, video games, and other media (31%), alongside food and candy (30%).

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Finding Gift Inspiration

With so many options available, consumers are turning to various platforms for gift ideas. The NRF survey indicates that 44% of shoppers seek inspiration through online searches, while 36% rely on advice from friends and family. In-store browsing and wish lists capture the attention of 30% and 26% of consumers, respectively. Interestingly, social media platforms are playing an increasingly significant role, especially among younger shoppers. For those aged 18 to 24, platforms like TikTok (28%) and Instagram (27%) have become key sources for gift inspiration. This trend highlights the evolving landscape of consumer behavior, as younger demographics use social networks to guide their shopping choices.

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The Hottest Toys of 2023

The competition within toy categories remains fierce, but familiar names are making their mark once again. For boys, the most sought-after gifts include Lego, Hot Wheels, video games, and PlayStation items. For girls, the top selections feature Barbie, dolls, Lego, makeup, and Disney-themed products. Pop culture continues to shape toy trends, with brands such as Spider-Man and Barbie capturing the attention of gift-givers. The resurgence of Disney merchandise also emphasizes the appeal of nostalgic brands to a younger audience.

Gift Cards: A Steady Choice

Gift cards persist as a popular gifting option. Spending on gift cards is expected to reach $28.6 billion, just shy of last year’s $29.3 billion. Shoppers typically plan to purchase three to four gift cards, averaging around $51.18 per card. The predominant choice for gift cards are restaurants, which account for 30% of the total, followed closely by department stores and bank-issued cards at 25% each.

Payment Trends Evolving

As consumer preferences shift, payment methods are also evolving. Approximately 44% of shoppers plan to use debit cards for their purchases, while 39% will choose credit. Notably, digital wallets are gaining in popularity, with 57% of consumers indicating they will utilize platforms like PayPal (30%), Apple Pay (15%), and Cash App (14%). This trend points to the increasing convenience and security offered by digital payment options, catering to a tech-savvy consumer base.

The Spirit of Giving Back

This holiday season is not just about receiving; consumer generosity is also evident. The NRF found that 66% of shoppers intend to participate in charitable activities, whether by donating money or goods. This spirit of giving highlights the significance of social responsibility in consumer decision-making.

Optimistic Spending Forecast

Looking ahead, the NRF forecasts a record-breaking holiday season, with spending expected to increase by 2.5% to 3.5% over last year. This translates to an anticipated total of $979.5 billion to $989 billion in holiday sales this November and December, up from $955.6 billion in 2022. Online shopping is anticipated to be a major driver of this growth, with non-store sales projected to rise between 8% to 9%, potentially reaching as high as $297.9 billion. This projection aligns with last year’s online sales growth of 10.7%, where figures totaled $273.3 billion.

As NRF President and CEO Matthew Shay noted, “The economy remains fundamentally healthy and continues to maintain its momentum heading into the final months of the year.” With a strong job market and consistent wage growth, American families are positioned to engage in holiday spending, reinforcing the significance of this festive season.

In conclusion, as consumers prepare for the Cyber 5, understanding shopping behavior, popular gift categories, and payment preferences can guide retailers in optimizing their strategies for success. Armed with insights from the NRF and the latest market trends, businesses can effectively reach their audiences and maximize sales during this crucial shopping period.