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The Bank of America Institute has recently delved into the impact of increasing online shopping habits on holiday shopping trends, using their internal credit and debit card data. The report highlights a notable shift, particularly among lower-income households, towards online shopping for better deals, moving away from traditional brick-and-mortar stores.

According to the report, there has been a 5% shift in in-person brick-and-mortar spending away from Black Friday and Christmas Eve since 2019, with a growing preference for online shopping, evidenced by Cyber Monday gaining a 2% share of holiday spending. This trend, accelerated by the pandemic, continues to show strength even as restrictions ease.

Data from August 2024 indicates that online spending now accounts for 26% of total retail card spending, with a significant increase driven by households earning less than $50K annually. This trend of prioritizing online convenience over in-store experiences is particularly evident during the holiday season, with online sales peaking around Cyber Monday and again before Christmas.

While lower-income households have shifted significantly to online platforms, higher-income households have maintained their spending at shopping malls. BofA suggests that this stability indicates a preference for higher-end shopping malls among wealthier consumers.

Overall, traditional holiday shopping hotspots like Black Friday and Christmas Eve still hold influence, but their impact is declining, with online spending during the holiday season almost matching that of brick-and-mortar stores. Looking ahead, the 2024 holiday season is expected to see continued growth in online spending, particularly among lower-income households focused on value and bargains, creating a highly competitive retail landscape.

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