Holiday Shopper Report – 2023 Edition

The holidays are here again! It is a time for gathering and celebrating together. Traditionally, gift-giving is a significant part of the season, so I was out and about over the Thanksgiving weekend to witness first-hand how the holiday shopping season kicked off. I have been doing this annually and reporting on my findings since my early years at the firm back in 2007. You may recall that US consumer spending represents approximately 70% of US GDP, so keeping apprised of trends within the consumer sector is essential.

Holiday spending for 2023 is expected to grow between 3% and 4%. The National Retail Federation forecasts that holiday sales during November and December will eclipse $5 Billion for the first time ever, shattering last year’s $4.9 Billion record.

Early reports from Adobe Analytics indicate that Black Friday generated $9.8 Billion in online sales, up 7.5% from last year and hitting an all-time high. Shoppers appear eager to take advantage of marquee sale days to maximize discounts. There is a noticeable price sensitivity, and this has led to an increase in the buy now pay later flexible payment method – up 47% from 2022. Top selling categories were reported to be electronics, toys and gaming.

There was an incredible amount of momentum going into yesterday’s “Cyber Monday.” Retailers have been pushing online deals to capture more Dollars, which was expected to be the biggest shopping day of the entire year! It happened! Shoppers spent $12.4 Billion on this year’s Cyber Monday, which is a new record. Strong demand was found in Hot Wheels toys, PlayStation 5, smartwatches and kitchen appliances. There must be a lot of people on the “nice list” this year!

I hit the sales over the holiday break for my traditional shopping adventure to get some first-hand data. The holiday sales started earlier this year – well before Thanksgiving week.

Sales appeared weeks before the Thanksgiving holiday as retailers vied for wallet share of consumers. I looked forward to the day after Thanksgiving as the traditional start to the holiday shopping season.

As has been the case since the pandemic began, most stores were closed on Thanksgiving and set to open dark and early on Friday morning. After a Thanksgiving Day of family and eating, I perused the circulars (which, like many other things, have moved away from print and are now mostly digital). I set my alarm for 4:30am. My 11-year-old daughter asked to come along again this year, so off we went Friday morning.

Our first stop was Kohl’s, which opened at 5:00am. We pulled into the lot at 5:05am and parked among 8 other vehicles. Kohl’s had scratch-off tickets for shoppers for prizes and money off your purchase, good for that day only. Personally, I liked this tactic as it was designed to bring shoppers in the doors. Unfortunately, I don’t think word had gotten out because there were not many shoppers at the open, or perhaps the $5 we each got was not enough to lure others out of bed at that early hour. Kids’ and juniors’ clothing were the most popular areas of the store during our trip, which lasted about 45 minutes. When we left, another 10 cars had joined the lot.

6am rang in Macy’s opening and is always a favorite of ours after watching the Macy’s Parade on Thanksgiving Day. Again, customers were light, about 25 cars in total, some of which we suspect were staff. Only 6 people queued up with us as the doors were unlocked. Women’s shoes, especially boots, were what shoppers gravitated toward, followed by cosmetics. The Toys R Us branded toy department was empty at that early hour. Lots of deep discounts on sweats and jackets. Macy’s, like many retailers, had begun Black Friday sales both in-store and online prior to Friday morning, so there was no incentive really for shoppers to show up early on Friday except for tradition.

At 7am we pulled into Target’s lot where there were about 65 vehicles. The electronics department was the most populated, but still a far cry from the crowds seen a handful of years ago. We snatched up some books at buy 2 get 1 free and also a few grocery items. With online deals the same as in-store, the lure of traditional in-person shopping is not the same at big retailers at early hours. By 8:30am we were headed home for a nap and to have some family time.

After a hiatus for my son’s basketball game, we headed to the Novato shopping center around 3:15pm and the crowds had arrived. We had to loop the parking lot twice to locate a spot. Costco was jumping and we witnessed lots of customers coming and going. 

We headed to Nordstrom Rack to see what deals they had, notably an additional 40% off red-tagged items. Shoppers were all over this and the line for the register was 45 people deep! The store did a good job of managing this by having a manager roaming with a wagon of waters and snacks to keep customers content while they waited to pay. We were no exception. A few shirts and pairs of shoes fell into our basket as both of my kids shopped for each other and dad. 

We continued down the way. Sephora was very busy as cosmetics, perfume and skincare are hot items this season. Petco had about 20 customers and a nice display of Christmas and Hanukkah treats for good dogs and cats. Carter’s had aggressive discounts but only a handful of customers.

Later, we headed back to the mall for another traditional holiday activity: the movies. Wish, the latest Disney flick, was released the day before, and my kids were excited to see it. I was surprised that only about a dozen other folks were in our 6pm showing. For my family and me, it hit the right note to start the season!

On Small Business Saturday, we traveled to San Anselmo for our annual spoiling of our dog at Dogville. They had a great display of holiday merchandise, and we filled our bag along with 2 other customers in this small boutique. We noticed that restaurants were full on Saturday morning as we popped into our favorite café Comforts for a few gift cards – maybe everyone was fueling up before shopping later in the day. The specialty olive oil press, Amphora Nueva, had a great sale going and we participated, grabbing a few bottles. Vintage jewelry store Belinda Warwick and accessories and décor outlet store Rock Flower Paper were hot spots for local shoppers. Of course, we wrapped up our day at my husband’s shop, Bananas at Large in San Rafael where guitars and accessories were popular over the weekend. I must have done my part for the Economy because, by Saturday evening, I had a note from my bank asking me to verify my purchases for the day to make sure there had not been any fraud.

Sunday brought another basketball game for my son, however, I was able to sneak out in the afternoon to scout out the mall in Corte Madera. The Apple store was humming with lots of shoppers and the pace, while quick, was orderly. Known not to discount heavily, Apple was running a promo that if you buy an eligible product, you get an Apple gift card to use later. Example, if you buy an iPad 10 you get a $50 gift card. Apple knows its customer base is loyal to the Apple ecosystem and it keeps coming back for more and more Apple products.

Macy’s was much more crowded at 4pm on Sunday than it had been at 6am on Friday. Still, the lines were short. Merchandising was compelling and I grabbed a few soft goods for loved ones. In Nordstrom, shoes were popular, as were cosmetics and perfume. I also noticed that the store had partitioned off more square footage on its second floor for preparing and storing of online orders. The buy online and pick up in-store or curbside trend continues to gain momentum.

This weekend was a festive and fun start to the holiday shopping season. My biggest takeaways are these:

  • Festive consumers still want to shop in-person but not necessarily at 5 or 6am.
  • Retailers need to make a compelling reason for shoppers to get into stores.
  • Shoppers are trading down (shopping more at discount retailers) and looking for discounts this season.
  • Online shopping continues to grow in popularity – this trend is irreversible.
  • Buy online and pick-up in-store trend has accelerated, stores are devoting square footage to this.
  • Shopping local feels good and keeps you connected to your community.

I hope you had a wonderful Thanksgiving and good start to the holiday season!


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