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Holiday 2024 Retail Predictions for Emerging CPG Brands

Holiday 2024 Predictions Cover

As Q4 2024 approaches, anticipation is building across the consumer goods ecosystem. Brands are gearing up for a dynamic holiday season, fueled by evolving consumer behaviors and an increased focus on sustainability and innovation. At Lunr, we’re witnessing this excitement firsthand as brands prepare to navigate these shifts, capitalize on emerging trends, and lay the groundwork for a successful 2025.

"After the chaos of the pandemic, 2023 allowed us to regain a sense of predictability in the market. Consumer brands across various verticals are now better prepared to meet demand, particularly as we head into the holiday season. At Lunr, we’ve been working closely with our partners to ensure they are fully equipped to meet ambitious holiday goals."

- Erin Wall, CRO of Lunr

Economic Outlook and Projections

U.S. retail sales for 2024 are projected to grow by 2.5% to 3.5%, potentially reaching $5.2 trillion. Online sales are expected to outpace overall growth, with a forecasted increase of 7% to 9%, which could push online sales to as much as $1.5 trillion. Mobile commerce is becoming increasingly dominant, anticipated to account for nearly 45% of total e-commerce sales.

NRF-SORAC-2024-Chart

NRF full-years retail sales forecast

As part of this broader retail growth, holiday spending is expected to see a moderate increase of 3% to 4% over 2023, potentially reaching between $957 billion and $967 billion, according to the National Retail Federation (NRF). This growth aligns with the average annual holiday sales increase seen in the decade before the pandemic, indicating a return to more typical spending patterns.

Spending patterns are expected to differ by demographic, with a significant portion of Gen Xers and Baby Boomers planning to maintain their holiday budgets, while younger generations like Gen Zers and Millennials show more variability in their spending intentions.

2024 Holiday Consumer Research Report

Salsify 2024 Holiday Consumer Research Report

Consumer Trends Shaping the 2024 Holiday Season

As consumer behaviors continue to evolve, several key trends are emerging that will define the 2024 holiday season. 

Shoppers are increasingly relying on credit and flexible payment options, with 37% of global shoppers reporting higher credit card usage and 32% turning more to "buy now, pay later" services. Simultaneously, shoppers are value-seeking: 85% of shoppers plan to compare prices across retailers. 

The rise of Chinese shopping apps is another significant trend, with 63% of Western consumers planning to purchase from these platforms due to lower prices. Meanwhile, the demand for free shipping remains high, with over half of shoppers more likely to complete an online purchase if delivery is free.

Temu home screen

Two-thirds of Millenials say they’ll buy holiday gifts on Chinese shopping apps like Temu, pictured (source).

Additionally, the integration of AI in the shopping experience is gaining traction, with 53% of shoppers expressing interest in using generative AI to find the perfect gift. This year also marks a shift towards concentrated purchasing during Cyber Week, with two-thirds of shoppers planning to hold out for deals during this period. Online shopping is particularly favored on Black Friday, with 72% of shoppers now preferring this digital approach.

Loyalty programs continue to play a crucial role in consumer decision-making, with nearly half (46%) of shoppers citing earning and redeeming loyalty points as the second most important factor after price.

Evolving Gift-Giving Trends for Holiday 2024

Popular verticals for the 2024 holiday season are expected to follow familiar patterns, with fashion and apparel, personal care and beauty, electronics, and food and beverage/alcohol likely leading the pack. However, as the holiday season unfolds, consumer product brands should consider how these trends might shape their strategies moving into 2025.

The latest gift-giving patterns reflect broader shifts in consumer preferences across these verticals:

  • Sustainability: Over half (52%) of consumers are making more sustainable choices, with 65% planning to buy environmentally friendly products. This trend underscores the increasing importance of sustainability in consumer decision-making.
  • Personalization: A significant 66% of U.S. consumers express a desire for personalized gifts, highlighting a strong preference for customization, whether through personalized packaging or limited-edition product lines.
  • Gift Cards: As the most requested holiday gift for the 14th consecutive year, gift cards continue to be a popular and versatile option for consumers.
  • Experience Gifts: Experiential gifts are on the rise, with 92% of consumers expressing a preference for them in 2023, up from 77% in 2022. This shift suggests a growing consumer interest in experiences over material goods.
  • Self-Gifting: Self-gifting is another notable trend, with 61% of shoppers buying for themselves during the holidays. Millennials and Gen Z are leading this trend, reflecting a broader movement toward self-care and personal indulgence.

Preparing for a Successful Q4 2024

To capitalize on these trends, companies must remain agile and consumer-focused. Ensuring that inventory levels meet the anticipated demand from retail partners is particularly critical during the holiday season. Securing the right products at the right time can make or break a brand's success. At Lunr, we work closely with our brands throughout the year to navigate these peaks in demand with precision, helping them meet consumer expectations seamlessly.

Interested in learning how Lunr can help your brand meet the demands of retailers and succeed during the holiday season and beyond? Reach out to our team today to explore how we can support your inventory financing needs to ensure your brand is well-prepared to thrive during these pivotal months.

Bibliography

  • National Retail Federation (NRF). "2024 Retail Sales Forecast." NRF, source.
  • National Retail Federation (NRF). "2023 Holiday to Reach Record Spending Levels." NRF, source.
  • Coresight Research. "Holiday 2024: Early US Retail Outlook." Coresight Research, source.
  • The Roundup. "Environmentally Conscious Consumer Statistics." The Roundup, source.
  • Comperemedia. "This Holiday Season, Personalization is Key." Comperemedia, source.
  • Universe. "People Prefer Experiences to Physical Gifts, Study Finds." Brigham Young University, source.
  • National Sporting Goods Association (NSGA). "NRF Forecasts Retail Sales Increase in 2024 Near $5.28 Trillion." NSGA, source.
  • Salsify. "2024 Holiday Consumer Research Report." Salsify, source.
  • Salesforce. "Holiday Shopping Predictions." Salesforce, source.