Nov 12, 2013 Dave King
The holiday season is generally the most lucrative period of the year for retailers in the United States. Major shopping days such as Black Friday, Small Business Saturday and Cyber Monday are becoming more popular among American consumers as they ramp up spending toward the end of the year to get presents for family members and loved ones.
It's a pivotal period for businesses, often determining whether or not they will see a profit for the fiscal year. However, there is reason to believe this coming holiday season may not be as lucrative as others in the past.
Americans cutting back on spending
A recent poll by the National Foundation for Credit Counseling (NFCC) found that American consumers are planning to scale back their purchasing behavior this season. According to the source, 86 percent of consumers plan to reduce what they spend during the holidays, or not spend at all.
Despite the recovering economy, many consumers are reluctant to return to lavish spending practices, a fiscally responsible byproduct of the economic downturn. Also, experts with the NFCC indicated that many Americans are still not on solid financial footing.
"The statistics speak loudly, and underscore that consumers are not willing to repeat the mistakes of Christmases past by spending irresponsibly this year," said Gail Cunningham, spokesperson for the NFCC. "The persistently high rate of unemployment coupled with the long duration of unemployment are still very real challenges many people are facing."
Mobile payments prove profitable
Although many recent economic indicators and reports have been showing more positive outlooks than were seen during the Great Recession, the economy is still in a state of recovery. Therefore, retailers need to take more proactive steps to connect with consumers to increase their chances of making a sale during the holidays.
One strategy that could increase revenue is adopting mobile payment solutions. Although many consumers have not embraced mobile transactions tools as much as many financial experts have predicted, the market is still growing at a significant rate. Data from eMarketer found that mobile payments in the United States will likely surpass $1 billion this year, up from $539 million in 2012. The source also predicated that the market value will reach $58 billion by 2017.
It's clear that mobile payments offer incredible potential for expansion. Retail and banking leaders who want to take advantage of this market in the run up to the holidays should take immediate steps to increase their mobile presence.