Each year when the holiday season rolls around, people across the country find joy in reuniting with family, escaping on winter vacations and indulging in savory and comforting food. But the season also heralds the onset of anxiety related to the balancing of gifting needs within a budget stretched thin by inflation.
To find out more about what to expect from this holiday shopping season, The Daily caught up with Somali Ghosh, associate professor of marketing at Weatherhead School of Management. Gosh explained the latest customer insights reveal that there’s good news ahead for retailers and holiday shoppers alike.
“Holiday shoppers seem determined to celebrate in style, stepping away from the financial caution apparent in the back-to-school shopping season,” Gosh noted. “Holiday shoppers plan on spending (on average) more this festive season than they did in the past season, many plan on gifting themselves with expensive gifts while shopping for deals and discounts for gift giving not only on Black Friday and Cyber Monday, but on Thanksgiving day as well.”
Read on to learn more about Gosh’s insights into this holiday shopping season.
1. Holiday shoppers are shopping earlier and for a smaller period of time but spending on average more this year.
The Nielsen survey indicates that holiday shoppers are shopping earlier, (in fact shopping started as early as October) to find the right deals and spread out expenses over time. Holiday shoppers are shopping for 5.8 weeks as compared to 7.4 weeks in 2019, according to the Deloitte survey.
About 80% of holiday shoppers will spend the same as, or more than, they did last year, noted in the ICSC survey. In fact, average spending per family is likely to be $1,652 this festive season surpassing pre-pandemic figures while families with incomes ranging from $50K–$99K and $200K+ will see increases in spending (per the Deloitte survey), families with annual incomes of $120K will be spending an average of $3000 this shopping season (PwC ).
2. Black Friday and Cyber Monday will continue to be popular shopping times, however this year many will also shop on Thanksgiving day itself.
While the Deloitte survey indicates a whopping 66% of holiday shoppers (up from 49% in 2022) are looking out for the Black Friday and Cyber Monday deals this year, the KPMG survey indicates an even higher number of shoppers interested in shopping in this period (78%) and that about half of all shoppers (49%) are expecting more deals this year.
A third of all holiday spending budgets are being allocated by about 78% of holiday shoppers for the Black Friday and Cyber Monday period (Deloitte survey). This period will also see high-budget holiday shoppers participate in increasing numbers as compared to the more budget conscious. High spenders (27% of consumers) will likely account for 68% of all holiday shopping during this time period (Deloitte survey). This year, the KPMG Survey, estimates that 29% of holiday shoppers plan on shopping—even on Thanksgiving day.
3. Popular shopping items will include the usual—gift cards, money and apparel, to name a few.
According to the Deloitte survey, holiday shoppers are determined to splurge and enjoy the holiday season, in spite of tight budgets. Holiday shoppers are still somewhat price sensitive for non-essential expenditures due to inflationary pressures, but they are willing to spend on locally sourced and environmentally sustainable goods, according to PwC.
According to the KPMG survey, some of the top gifts are gift cards, money and apparel. Families with annual incomes of $120K will be spending an average of $3,000 this shopping season, preferring lesser known or unbranded products, as deals and discounts take center stage in their minds (according to PwC ).
Additionally, some holiday shoppers are favoring non-gift purchases such as decorations and non-gift products and apparel (Deloitte survey)—and Gen Z is favoring spending on travel experience and shopping via social media.
4. Holiday shoppers plan on spending the same as or less than they did last year on holiday gatherings.
But, they plan on attending more gatherings (KPMG survey) and spending $219 on average on any event gathering. Gift giving is being prioritized over expenditure on social events.
The economy is showing some resilience and this shopping season should see good spirits on both the consumer and retailer ends. It would help consumer spending if some of the biggest consumer fears like shipping delays and out of stock products (per KPMG survey) are addressed by retailers adequately.