Holiday Spending on the Rise Despite High Costs of Essentials, New Surveys Show
New research from two companies reveals that while holiday spending is expected to increase this year, the high cost of essential items is forcing many households to cut back. As a result, shoppers are hunting for deals, focusing on quality and price, and turning to social media for gift-giving inspiration.
According to a fresh survey from ESW, the direct-to-consumer e-commerce company, 61 percent of shoppers polled said they are looking to spend more than $600 online during this year, which compares to 48 percent last year. “However, among consumers who said they will reduce spending, 47 percent cited high prices on everyday items such as groceries and gasoline as the reason they will spend less for the 2024 holiday season,” the report said.
Martim Avillez Oliveira, ESW’s chief revenue officer, said even though global inflation is coming down, “many consumers are still feeling stretched due to high essentials costs. One way retailers can weather the variables of this coming holiday season can be with a robust global commerce platform.” Oliveira noted that 43 percent of consumers polled “say that they plan to shop more online this holiday season giving global [direct-to-consumer] e-commerce retailers a greater opportunity to capture a bigger share — and consumers an opportunity to find better prices — in what looks to be a very competitive holiday shopping season.”
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The economic environment is also shaping how consumers shop. The ESW survey found that quality and price were the most important consideration for 66 percent of respondents. “Only 13 percent of shoppers agree that brand name is most important when purchasing gifts,” the report stated.
Regarding social media, 51 percent of those polled say that they will not use TikTok for holiday shopping; “however, when broken down by age demographics, 65 percent of Millennials and Gen Z combined will use TikTok for inspiration.” Consumers also said they’re turning to “Amazon Big Deals Day” and other events, such as Black Friday, to get the most bang for their buck.
When it comes to returns, a bane for many retailers, 49 percent of consumers polled said they “will only purchase items that they can return for free” while 38 percent of shoppers said they “will pay between $1 and $9 for expedited shipping, while 31 percent say they will not pay for expedited shipping.”
In a separate report from Slickdeals, the online shopping platform, 70 percent of U.S. consumers polled plan to shop for deals on Black Friday and during Cyber Week. “Additionally, 55 percent said they intend to participate in Amazon Prime Big Deal Days, while 38 percent will shop early October events that mark the start of the holiday season,” the report’s authors said, adding that 42 percent of respondents said they expect to take advantage of early December sales.
The consumer survey was developed by Slickdeals and conducted via Suzy.
“While 46 percent of respondents stated that inflation would affect their fall and winter sales shopping, 49 percent plan to spend about the same as they did last year on their holiday shopping,” the report’s authors said. “Another 29 percent plan to spend more than they did last year, with only 22 percent saying they plan to spend less.”
Digging deeper into the results revealed that for Amazon Prime Big Deal Days, 68 percent of those polled said they’re shopping for themselves while 45 percent shop for their immediate family. “Similarly, during Black Friday and Cyber Week sales, 72 percent shop for themselves and 49 percent for immediate family.”
Other findings include that 58 percent of those polled see fall and winter sales events as an opportunity to wrap up their holiday shopping. “Forty-six percent use these events to purchase specific items they’ve had their eye on, while 45 percent shop opportunistically to snag the best deals,” the report stated, adding that 40 percent of respondents said they take advantage of the sales to stock up on household essentials.
Looking at survey results by category, 63 percent of those polled are planning to spend on clothing and shoes while 50 percent said it will be on groceries and 40 percent on technology and electronics, personal care goods and toys.
Neville Crawley, chief executive officer of Slickdeals, said holiday shopping can be stressful, but his company offers a solution for consumers. “Whether shopping for yourself or checking off your holiday gift list, navigating all the deals during this season can feel overwhelming,” Crawley said. “By leveraging a community of millions of shoppers like the one at Slickdeals, you can easily spot the best prices on the best products.”
Nikki Baird, vice president of strategy and product at Aptos, helped put this holiday shopping season into perspective by noting current conditions have created a highly competitive market where retailers and even other sectors are vying for a share of the consumer’s wallet. Baird said retailers and brands “aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars.”
Baird described retail right now as “a mixed bag—some winners and some losers. And a lot of that comes down to the experience offered. Consumers today have higher expectations for what a retail experience—particularly in the store—needs to offer than it did five years ago.”
