3 key factors that led to a record-setting holiday season

Consumers turned out to shop despite concerns around supply chain, inflation and omicron

With initial reports in, it’s clear the 2021 holiday shopping season was one for the history books. Despite concerns around supply chain disruptions, inflation and the emergence of omicron halfway through the season, the consumer momentum that characterized the first 10 months of 2021 carried through the end of the year.

According to NRF’s calculations, retail sales in November and December increased by 14.1 percent over 2020, with categories like clothing and accessories, sporting goods and general merchandise seeing some of the strongest growth. To understand what contributed to this record shopping season and lessons for the future, the NRF research team took a closer look at our consumer data and identified three trends.

Christmas in July? Maybe.

With concerns around supply chain disruptions looming at the start of the season, many retailers encouraged consumers to start their holiday shopping early. Black Friday-type sales started by early November, if not before Halloween — and consumers responded. A record 61 percent of holiday shoppers started browsing and buying by early November.

 

While supply chain issues certainly added pressure for consumers to get a head start on the holidays in 2021, the reality is that it is part of a broader shift that has been taking place over the last decade. What’s behind this trend? Even before the pandemic, holiday shoppers said they like to get an early start to spread out their budgets and avoid the stress of last-minute shopping.

The price was right

Between supply chain issues that could lead to lower inventory and the potential impact of inflation, there were some concerns that consumers would have a harder time finding deals and promotions during the holiday season. Consumers certainly reported seeing higher prices on items like gasoline and groceries. However, overall, they felt the deals they saw during key events like Thanksgiving weekend were just as good as in 2020. And, notably, that the promotions they saw earlier in the season were just as competitive.

While inflation might not have impacted the momentum of the 2021 holiday season, it will likely stay on consumers’ radar in 2022. Data from Google shows that searches for “low budget” are up 100 percent year-over-year. With pressure on gas prices, consumers might be more interested in staying close to home. Data from Prosper Insights & Analytics shows that 29 percent of consumers plan to shop closer to home due to fluctuating gas prices and Google searches for “open now near me” are up 400 percent year-over-year.

Stores are here to stay

Even with mandated shutdowns forcing many consumers online in the early days of the pandemic, shoppers have proved that stores aren’t going anywhere. That was fully evident over Thanksgiving weekend, when approximately 104.9 million consumers visited stores, up from 92.3 million in 2020. However, as a new study from NRF and IBM found, consumers across the globe want it all — the tangible experiences of in-person shopping and the convenience of digital channels. Even while stores remain a critical touchpoint, shoppers use a combination of channels as they research, browse and buy products.

 

While COVID-19 has taught us not to be certain of anything, there are indications that 2022 will mark a new phase of the pandemic with some semblance of “normal” life. But many of the trends that emerged throughout 2020 and 2021 will likely continue — whether that is consumers shopping well in advance of holidays to avoid crowds or retailers introducing even more ways to integrate our online and offline lives.

One thing that will likely stay constant? A focus on resiliency as consumers and retailers look to navigate any new challenges 2022 will bring.

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