Dive Brief:
- Against the backdrop of inflation, low-income consumers plan to spend more this holiday season with a 25% increase year over year compared to a 7% decrease from higher-income shoppers, according to a report from Deloitte.
- Thirty-seven percent of U.S. households say their financial outlook is worse than last year, according to the survey of nearly 5,000 consumers and 40 retail executives. With that, higher-income consumers indicated they plan to spend less this season on non-gift purchases (down 23%), with a 25% decrease in the electronics and accessories category compared to a 28% increase with low-income shoppers.
- The survey showed that consumers plan to purchase nine gifts this year compared to 16 in 2021. Whereas all categories from clothing to toys indicated a decrease in average spending, the “gift card and other” category saw a 7% increase in holiday budgets, per the report.
Dive Insight:
With the various takeaways from Deloitte's latest report, the data shows a mixed bag of holiday season expectations. Overall spend is expected to be on par with 2021 at $1,455 per consumer, but the study found that shoppers are not spending in the same way due to the impact of higher prices.
"High prices have holiday shoppers prioritizing their purchases, but there are bright lights throughout the season,” Nick Handrinos, vice chair at Deloitte, said in a statement. “Lower-income families feel more confident heading into the holidays, younger generations are embracing new retail formats, and retailers do not anticipate the issues with stockouts we saw last year. As consumers aim to be strategic about their purchases to outsmart inflation, retailers who can be flexible to meet consumers where they are will be more likely to build loyalty and profit from the holiday season and beyond."
The survey also shows consumers are ready to spend sooner than later, with 38% saying they will shop earlier this year and 23% saying their budgets will be spent by the end of October. That might be news some retailers anticipated, with Target and Amazon starting deals sooner than ever before in October.
Respondents also expressed that social media would play a larger role in their holiday shopping compared to last year, with 34% planning to use such platforms compared to 28% in 2021. Far fewer respondents in a Gartner survey last month indicated getting gift inspiration from social media channels, but 56% of Gen Z consumers expressed they planned to buy holiday gifts through the medium according to Bluedot research.
Expectations for retailers to provide a variety of delivery options are high according to Deloitte. More than half of consumers prefer same-day or next-day delivery from a retailer this year, increasing 5 percentage points over 2021. Services like buy online, pick up in store and curbside pickup also saw larger increases in preference from respondents compared to standard delivery this year.
