The Battle of the Brands: Who Will Dominate Holiday Gifting in 2024?

The stage is set for the final act of the holiday sales season as Christmas unfolds, followed by Boxing Day and the last sprint to close out 2024. With retailers already deep in the busiest time of their fiscal year, which brands are celebrating strong sales and profitability, and which might not find themselves as fortunate?

We turned to our BrainTrust members to weigh in and help us explore key questions about this holiday season.

The Biggest Retailers Battle It Out for Holiday Sales Supremacy

One thing that most consumers can agree on is that it’s been a bellwether season for the biggest retail brands. Walmart outperformed expectations, while other stalwarts like Macy’s were forced into strategic restructuring.

Warren Shoulberg, senior contributor for The Robin Report, put it succinctly: “If you’re not in the Walmart/Costco/TJX business, you’re going to have a tough holiday season. Those are the big boxes that are putting everybody else to shame.”

While Mark Ryski, CEO of HeadCount Corporation, agreed with Shoulberg — at least regarding Walmart — he had some macroeconomic foundations to lay first.

“Notwithstanding the year-over-year increase in consumer spending and low unemployment, there’s still plenty of uncertainty. Consumers are buying, but they’re looking for the biggest bang for their buck. I expect retailers to get especially promotional this holiday season, and the retailers that can sustain promotional pressure and create compelling deals will do well,” Ryski said.

“The biggest players, like Walmart and Target, will battle it out and likely do well, and the off-price train will keep chugging along. Retailers must do everything they can to convert their store visits into sales because if the shopper leaves without buying, they’re likely not coming back this holiday season,” he added.

Not everyone agreed on Target’s fortunes this Christmas, however. Rachelle King, U.S. commerce lead at Google, had a different projection for Target, as well as one other competitor in the space.

“Target and Walgreens have been on my radar. They are both strong, established brands that generally perform well in the holiday season but have had a rocky 2024,” she said. Target most recently shared a somewhat tepid earnings report in late November, falling short of analyst expectations.

“Each retailer has their own respective challenges, but collectively, we are seeing operational inefficiencies and shifts in consumer spending starting to rattle these established brands. There is no silver bullet or secret formula in retail, but knowing your consumers, staying relevant, and strategic agility are back-to-basics that can strengthen any retail foundation,” King added.

SHEIN and Temu Could See Some Resistance Moving Forward

While SHEIN and Temu have certainly captured a fair size of holiday market share, with Salesforce having predicted in August that 21% of holiday purchases would be made from these two outlets in addition to TikTok Shop.

However, is gifting items purchased from SHEIN, Temu, or similar low-cost retailers a great idea — and have they reached the peak of their respective market penetration?

David Biernbaum, founder and president of David Biernbaum & Associates LLC, prefaced his comments on the gift-giving aspect by speaking to the business models presented by both Chinese e-tailers.

“SHEIN and Temu offer affordable products, each with different business models and product-type selections, but I don’t believe either is a great choice for Christmas gifts for most of the people on your list. I like that SHEIN owns its own inventory, and I like that Temu works with small businesses. I like that Temu provides 90-day returns,” he began, before switching gears to discuss his perspective on the optics surrounding merchandise from these brands being offered as holiday gifts.

“However, it has been said that Temu and SHEIN’s low prices and low-quality products are raising eyebrows, and Temu and SHEIN are accused of questionable labor practices and a lack of transparency regarding their suppliers. For these and other reasons, using these types of online companies for holiday gifts might be awkward for you and your gift recipient,” Biernbaum concluded.

The Robin Report’s Shoulberg also chimed in on the subject, mostly — but not entirely — centered around what he perceived to be a business model under threat by an even larger competitor.

“This will also be the high-water mark for SHEIN and Temu. They are already wearing out their welcome with shoppers unhappy with their purchases, and now others like Amazon are going after that business big time,” Shoulberg said, referring to the launch of Amazon Haul.

Beauty, Name Brands, and Meaningful Gifts Could Take Top Spots

One thing that most experts agreed on: Trinkets and other clutter items could be taking a dip in popularity as more discerning customers decide to park their dollars elsewhere.

Neil Saunders, managing director for GlobalData Retail, elaborated on this score.

“Beauty remains a star category this holiday season, mainly because it is a practical, useful, and indulgent gift — something that ticks the boxes of gift-givers. With consumer finances remaining tight, most people want to give gifts that will be used and valued. The purchase of useless fripperies that just take up space in stockings is firmly out. Handbags, jewelry, and boots will also all do well this holiday season, at least from what we are seeing in our surveys,” Saunders said, before pivoting to discuss the uptick in dressing up for holiday events and a return to recreational crafting as a pastime.

“Holiday outfits are back with a bang: people dress more casually nowadays, so they are looking for an excuse to dress up a little. Crafting is also back in, with many people wanting to use downtime during the holidays to make and create,” he added.

On the other hand, Patricia V Waldron, contributing editor for RetailWire, had a slightly different outlook on the state of the retail fashion business this year, though she appeared to agree with Saunders regarding the lack of interest in useless gifts. “Luxuries (big and more modest), electronics, and experiences make it to the top of most wishlists. Fashion and fads don’t seem to catch shoppers’ attention as they did in years past,” Waldron said.

Brand name items, particularly concerning younger generations such as millennials and Gen Z, could be making a big comeback this Christmas. Lisa Goller, B2B content strategist at Lisa Goller Marketing, shared on the matter, “Retail icons Nike and Apple are capturing Americans’ share of wallet this holiday season. Enduring brand love and desirable discounts on items like AirPods and Nike Air Force 1 trainers fuel their popularity.”

She continued, “Abercrombie & Fitch is also performing so well that the company recently raised its sales forecast. Gen Z consumers crave the stylish hoodies and tops from A&F and Hollister they see splashed across their TikTok and Instagram feeds.”

Online Shopping and Purchasing ‘Experiences’ Could Represent the Future of Holiday Retail

Closing out the discussion, two BrainTrust members took a broader approach to the October-December retail season. Clay Parnell, president and managing partner of The Parker Avery Group, offered up a snapshot illustrating current consumer concerns as well as reasons why some brands experienced greater success than others.

“Overall, it feels like holiday gift shopping came much earlier this year due to retailer promotions amid fears of a pullback in spending. So retailers that were ready early with inventory, convenience, and pricing were the clear winners,” he explained. “Malls overall seemed quiet this holiday season, so it’s likely that traditional department store retailers, like everyone else, are leaning heavily on online shopping. Discount retailers, from dollar stores to off-price apparel retailers, are seeing strong performance due to pressure from inflation and overall consumer confidence concerns.”

The importance of experiences, and the value of experiences to today’s (and tomorrow’s) customer cannot be understated. At least, that’s the view taken by Lucille DeHart, principal of MKT Marketing Services and marketing expert for Columbus Consulting.

“One key growing trend to take note of is the increase in shopping for experiences. The industry predicts a 16% increase YOY or $735 spent by consumers on experiential gifting [per Deloitte]. Such purchases include travel, events/tickets, destination activities, gatherings, etc. Retailers need to take note of this pivot and create opportunities for their consumers to engage with their brands beyond physical purchases,” she said, before asking a question central to the argument.

“How? Perhaps offering exclusive dining experiences in stores or wine-tasting events, meet the designer/author activities, or pop-up shops at major events. One idea could be for sports brands to offer ticket sales to customers bundled with team apparel/accessory spend or for private streaming access to top chefs with dinnerware or cooking purchases. As consumers shift from aggressive consumption to more meaningful engagements, brands will need to follow suit (figuratively, not literally),” DeHart concluded.