Positive economic forecast boosts holiday spending hopes

Data from Circana indicates that a positive economic forecast for 2025 is expected to influence consumer spending during the upcoming holiday season.

As the economic outlook improves, Circana reports a trend of consumers seeking 'retail therapy' as a form of affordable escapism. This trend suggests that retailers and brands can engage consumers through creative marketing strategies during the holiday season. Special offers, interactive campaigns, and promotions could play a key role in encouraging additional spending.

Alistair Leathwood, Head of Analytics, Insights and Media APAC at Circana, highlighted how the current economic conditions shape consumer behaviours. "The cost of living squeeze has forced Australians to become more considered, savvy and promotionally reliant when it comes to shopping in general. With this backdrop, retail events such as Black Friday and Cyber Monday are growing in popularity, despite not being linked to traditional holidays in Australia," he stated.

Leathwood further explained that there is a growing positive sentiment around the economy, prompting expectations for increased spending in the November-December period. "We also expect a growing share of holiday shopping to be done online. We've already seen e-commerce sales growing this year at a double-digit rate and accounting for more than half of the unit sales growth in Circana-measured-sales," noted Leathwood.

He also stressed the importance of balancing in-store and online marketing strategies. "At Circana, we're emphasising the need to strike a balance with marketing and promotion plans both in-store and online. It underpins successful omnichannel category management," he suggested. Despite the growth in online sales, in-store remains the primary avenue for consumers to discover new products.

"In-store remains the leading way Circana shopper panellists discover new products. This is especially important at a time when innovation is needed to simulate demand. Shoppers have high expectations from the in-store environment, and stores need to continually innovate and invest to meet these," he said.

Consumer behaviour has significantly evolved in recent years, prompting retailers to adapt accordingly. The latest data from Circana identifies notable consumer priorities, including indulging in 'insperiences,' treat culture, cooking at home, and the demand for quick-commerce services.

As brands strive to keep up with shifting consumer trends, they are urged to utilise reliable data to understand spending patterns. This information is crucial for identifying target audiences and optimising marketing and advertising efforts.