US Retail Sales Likely to Go Up This Holiday Season According to MasterCard

As the holiday shopping season is coming closer, consumers and retailers are preparing their wish lists and getting ready to pour into malls for this year’s Black Friday.

According to MasterCard’s SpendingPulse, the forecast for this year’s overall sales would likely impress businesses as US retail sales growth is likely to increase by 4 percent compared to last year.

MasterCard SpendingPulse mainly research national retail sales data in the United States and try to find patterns by analyzing sales activity across all card types, cash and check.

Compared to buying products, this year, consumers are likely to spend more money on buying service than products. Commenting on this year’s holiday sales prospects, MasterCard’s SVP of Market Insights, Sarah Quinlan, said that consumers are likely to spend more money on getting good experience. For example, services like restaurants, travel related services such as car rentals, flights, and hotels, etc. are likely to see their sales go up during this holiday season. “Consumers put more of their discretionary dollars toward eating out,” she said.

She advised retailers that they need to position their products in a way which would make it a pleasant purchasing experience for consumers.

“It’s tying your merchandise into people’s daily lives. [consumers] find value for money in the merchandise. So, they are looking for things that make them feel as though they can see themselves creating a memory, creating an experience,” she added.

However, MasterCard’s SpendingPulse found that consumers are more likely to buy products in a physical retail outlet this year than going online. Although online retailers can offer deep discounts, ecommerce would likely represent a rather small percentage of overall retail sales in the US this year, the report indicated.

In 2014, Black Friday sales declined by 1.6% compared to 2013. This was mainly because more and more retailers extended their sales hours till the Thanksgiving Day and the exclusivity, and the whole point of buying within certain time was lost in the process. But, this strategy to extend hours paid off as overall spending went up.