An analysis from the First Data Corporation shows a discernible uptick in consumer spending in the period heading right into the holiday season — namely, the month of October. For that four-week period, their “SpendTrend” analysis tracked “same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations.”
By doing so, they found “dollar volume growth in October was 6.8%, a healthy uptick from last month’s growth of 5.3% despite the political strife in Washington. The growth was supported by the onset of cooler temperatures, which drove sales of seasonal merchandise and early holiday advertising attracting shopper foot-traffic.”
According to Krish Mantripragada, First Data’s Senior VP of Information and Analytics Solutions, “Consumer spending growth gained momentum in October, which should provide retailers with an optimistic outlook heading into the holiday season. Retailers should expect holiday spending to be modestly stronger compared to last year barring any number of external events that could negatively impact sales such as poor weather or geopolitical events at home or abroad.”
SpendTrend also found that for the tenth month in a row, consumers were spending more with credit cards than debit cards, with First Data declaring that consumers are once again comfortable using credit to fund “discretionary” spending — like those upcoming holiday gifts.
Though in fairness, other studies — like the recent survey by Harris Interactive — show consumers planning to rein in their holiday spending, so it remains to be seen which set of data will be borne out over the next few weeks.
The Harris survey did show a lot of planned reliance on card use, regardless of overall spending plans, with 31% of respondents saying they plan to charge gifts, compared to 34% who are mostly relying on annual savings, versus 27 per cent planning to use debit cards (which still infers savings of some sort.)
You can make it as easy on your customers as possible this holiday season by making sure all possible points of sale are up-to-date, from your online sales, to mobile terminals for trade shows or special events, to an ability to offer prepaid cards, accept electronic checks, and more.
After all, with First Data saying consumers have now “regained confidence,” make sure you’re equally confident on the payment side. Contact your AVPS Rep today.