Square’s Holiday Retail Report Reveals that Despite Warnings to Shop Early, Consumer Trends are Remaining Steady Amidst Supply Chain Concerns

Rhea-AI Summary

Square has released its Holiday Retail Report. This report forecasts stable holiday spending, with in-person shopping rising as consumers embrace physical stores.

Gift card purchases have surged by 43%, driven by supply chain concerns. Retail sales trends remain consistent with previous years, maintaining a median promotion of $10 off. Key findings include a 36% rise in toy demand and a 32% increase in home supply GPV. Square emphasizes the importance of creating seamless shopping experiences to foster customer loyalty.

Positive

• 43% increase in gift card purchases due to supply chain constraints.
• 36% increase in toy demand and 12% rise in average toy prices.
• 32% increase in GPV for home supply and warehouse retailers compared to last year.
• Retail sales promotions remain steady, with median discounts unchanged.

Negative

• None.

Home decor spending increases as consumers prepare their homes for in-person holiday gatherings, while popular items rise in cost

SAN FRANCISCO--(BUSINESS WIRE)-- Today, Square released its Holiday Retail Report, forecasting that this holiday season is not anticipated to deviate considerably from years past. As shoppers are excited to return to physical stores, in-person purchasing is up compared to last year, signaling a return to normal.

More consumers are purchasing gift cards

Supply chain constraints are risking on-time gift arrival, resulting in consumer gift card purchases increasing 43%, with physical gift cards seeing a 46% increase and e-gift cards seeing a 29% increase in purchases. Retailers are already preparing for consumers opting for gift cards instead of physical gifts, as 32% more businesses have sold gift cards this year compared to last.

Sales and promotion trends remain consistent

So far, supply chain and inflation concerns are not causing major changes in sales and promotions applied at retailers this year. The average number has closely followed 2019 and 2020 trends, with no indication that merchants are offering fewer sales. The value of offered sales also hasn’t fluctuated much, with a median promotion of $10 off and median percentage of 20% off.

Other key findings from Square’s Holiday Retail Report include:

• Even though retailers are urging consumers to shop early, Square found no considerable spike in consumer purchasing so far, indicating that holiday shopping is not starting earlier.
• Demand for toys is up 36% and their average price has increased 12%. Laptop sales are up 20% and demand for health and beauty items is up 81%. Meanwhile, jewelry demand has increased by 26% and air purifiers are up 59% in sales, yet the price has dropped 21%.
• As book sales rise, specific industries like manufacturers and distributors of books, magazines, and newspapers experienced an unusually large lift, increasing 40% in gross payment volumes (GPV), compared to a mere 0.5% last year.
• Home supply and warehouse retailers have seen a 32% increase in GPV compared to just 5% last year as consumers look to adorn their homes for the holidays.

“Businesses must find a way to create memorable and seamless shopping experiences during the holidays, further encouraging customers to come back into the New Year,” said Alyssa Henry, Executive Vice President, Square. “Convenience and customization will be key to meet buyer’s needs and expectations this year. These are the moments of truth that really matter and will build sustained brand loyalty and reputation.”

Methodology

Data compares payment transactions between September–October 2020 and September–October 2021 in the U.S. retail sector.

About Square, Inc.

Square, Inc. (NYSE: SQ) revolutionized payments in 2009 with Square Reader, making it possible for anyone to accept card payments using a smartphone or tablet. Today, we build tools to empower businesses and individuals to participate in the economy. Sellers use Square to reach buyers online and in-person, manage their business, and access financing. Square has offices in the United States, Canada, Japan, Australia, Ireland, Spain, Norway, and the UK.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211130005217/en/

Media Contact

press@squareup.com

Source: Square, Inc.

FAQ

What does Square's Holiday Retail Report say about shopping trends for 2021?

Square's Holiday Retail Report indicates that in-person shopping is up as consumers return to physical stores, and gift card purchases have increased significantly.

How much have gift card purchases increased according to Square's report?

According to Square, gift card purchases have increased by 43%, with physical gift cards up 46% and e-gift cards up 29%.

What are the key findings regarding retail sales promotions in 2021?

Retail sales promotions remain consistent with past years, showing no significant changes, with a median promotion value of $10 off.

How has toy demand changed this holiday season according to Square?

Toy demand has increased by 36%, with prices rising by 12%, reflecting a robust interest in these products.

What metrics indicate consumer behavior changes for holiday shopping in 2021?

Despite retailers urging early shopping, Square found no significant increase in consumer purchasing ahead of the holiday season.