Holiday spending is seen increasing this year.

It looks like it will be a merry holiday season for retailers this year.

Shopping forecasts from both PricewaterhouseCoopers Research and the International Council of Shopping Centers indicate holiday spending will be higher than last year.

The ICSC predicts a 3.3 percent increase in year-over-year growth versus last year’s 2.2 percent increase. According to ICSC, the shoppers they surveyed plan to spend on average $683.90. PwC was even more bullish with a prediction of an average spend of $1,121. Shoppers said they plan to start their purchase research online before heading to the physical stores to complete their gift buying.

“We continue to see positive consumer spending intentions ahead of the holiday season, with an emphasis on shopping in physical stores,” said Tom McGee, president and chief executive officer of ICSC. The group doesn’t deny that consumers crave experiences.

53 percent said that when they go shopping, they plan on eating at a restaurant and 36 percent said they would go to a movie. Mall Santas continue to be a draw with half of all adults with children planning on making a visit to the jolly old man for a photo.

Much has been made of the consumer preference for experiential spending over apparel purchases. However, PwC noted that when it comes to gifts, 52 percent of holiday spending will go to physical gifts, 31 percent will be spent on gift cards and only 16 percent will be spent on experiential gifts. Overall though, shoppers said they expect to carve out at least 42 percent, or almost half of their holiday budget, on travel and entertainment versus gift buying.

While the ICSC found that shoppers still prefer the physical store, PwC found that when it comes to Millennials, this group prefers shopping online. They use mobile devices and social media to find products and seek out deals for discounts.

The good news for retailers is that the generation younger than Millennials, Gen Z likes “stuff.” The like shopping in-store for personal electronics, clothes, shoes and toys. They are more tactile — to them, stuff matters. Fifty eight percent of these Zillennials said their gift budget would go to tangible gifts. They plan to spend more on clothes, shoes and accessories than Millennials.

No wonder retailers are spending big on wooing influencers. Ninety percent of Gen Z said they relate to their favorite influencer on a personal level. Over half said that they purchased a product promoted by one of their influencers.

Retailers will face the checkout challenge if they manage to get holiday shoppers into the store. Consumers that are used to one-click checkout with online purchases, no longer have the patience to wait in line. An easy checkout experience is their number-one priority. Unfortunately, the addition of EMV chip cards has slowed down the checkout process. On a positive note, it has spurred mobile payments with 21 percent of customers picking the tablet payment option if it’s available.

As for what consumers prefer to receive, according to PwC, 42 percent want a gift card and 31 percent want experiential gifts and only 27 percent want physical gifts.

And let’s not forget the fur babies — Millennials are expected to spend roughly $81 on their pets this holiday. On average, pets will be treated to gifts totaling about $62. Spot and Fluffy will be very happy indeed.

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