Dive Brief:

• This holiday season e-commerce is anticipated to be more popular than physical retail: 82% of shoppers plan to buy holiday gifts online and 77% plan to buy in-store, according to a report from consulting firm Fung Global Retail & Technology.

• Roughly 75% of all holiday shoppers (and a whopping 90% of Amazon Prime members) expect to buy from Amazon this year, while just half of consumers said they plan gift shopping at Target and Walmart. 

• According to the report, Walmart under-indexed by 6.5 percentage points for holiday shopping among Prime members versus all adults, suggesting Walmart loses shoppers to Amazon once they join its loyalty program.

Dive Insight:

Amazon is managing to shed expectations of low prices and keep its loyalists coming nevertheless, according to the new study. “Those who expect to shop at Amazon are motivated by quality, but they are less motivated by price than are those who expect to shop at Target, Walmart or Kohl’s,” according to the study.

Walmart shoppers, by contrast, are less motivated by quality than Target and Amazon shoppers. In a surprise for Macy’s, its holiday shoppers are motivated by quality and much less by price. Costco shoppers are driven by price and availability of products, while T.J.Maxx shoppers rank quality and location of stores, the study found.

Amazon is slightly more popular among younger consumers than among older ones, though Target is also a more popular destination among millennials and family life stage shoppers (i.e., those ages 18–29 and 30–44) than it is among older consumers, while Walmart is most popular among middle-aged consumers (ages 45–59). T.J.Maxx will see some 26% of 18–29-year-olds shopping there this season, and, in another surprise, Macy’s is also more popular among younger consumers than among older ones, the study found. EBay has lost its appeal among the youngest age group, which tends to be the most enthusiastic about online shopping, which Fung calls “a worrying sign for an e-commerce marketplace.”

Assortment is also a driver for Amazon, but free delivery ranks very high, especially among Prime members. While 37% of Prime members said rapid delivery is important to them, free delivery was a more significant driver than it is among the general population. Roughly half of Prime members said it’s important, according to the report. 

"Some brick-and-mortar retailers may be counting on their buy-online, collect-in-store services to fend off the Amazon threat this holiday season,” FGRT Managing Director Deborah Weinswig warned in a statement. “But consumers rank such collection services low as a factor that they consider when choosing where to shop: quality, price, location and availability will be the principal drivers for consumers as they decide where to shop this holiday season.”

Retailers can take heart in Fung’s measure of healthy consumer confidence, with 23% of respondents saying they expect to spend more on the holidays this year compared to last, though 21% expect to spend less. The bad news is that those expecting to spend more will do so only slightly, while those cutting back will be spending much less, Weinswig said. "The results suggest solid, though probably unspectacular, retail growth this holiday season," she said.

This story is part of our ongoing coverage of the 2017 holiday shopping season. You can browse our Holiday page and sign up for our Holiday newsletter for more stories.