First Data’s Data Points to Stronger Holiday Season
Consumer Spending Surge in October
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.”
Findings from SpendTrend
In carrying out this analysis, they discovered that October’s dollar volume growth reached 6.8%, marking a robust increase from the previous month’s 5.3% despite Washington’s political turmoil. This surge was fueled by cooler weather that boosted seasonal merchandise sales and early holiday promotions that drew in more shoppers.
Insights from Krish Mantripragada
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.”
Credit Over Debit: A Trend or a Norm?
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.
Contrasting Studies
While it’s true that First Data’s report indicates a rise in consumer spending, a recent Harris Interactive survey suggests otherwise, with consumers appearing to tighten their holiday budgets. Consequently, we’ll have to wait and see which trend prevails in the coming weeks.
Harris Interactive Survey Insights
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.)
Making Customer Transactions Seamless
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.
Consumer Confidence and Preparations for Retailers
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.
