Americans are looking forward to this holiday season, with many planning to spend the same or more on their holiday shopping compared with last year and support charitable organizations and local communities, according to results of the 15th Annual Holiday Shopping Survey from Accenture (NYSE: ACN).
Holiday spending is likely to rise this year, with consumers planning to spend US$598 this holiday season, on average, compared with US$539 last year. Most (71%) said they intend to spend as much or more than they did last year. Older millennials (32-39 years) anticipate spending US$705, on average, the highest among any age group.
The survey of more than 1,500 U.S. consumers found that 76% of them are looking forward to spending time with loved ones this holiday season, with 75% planning to buy gifts for close family and 41% buying gifts for neighbors, colleagues and friends. This “generosity of spirit” will likely extend outside the home, as 70% intend to make charitable contributions this year and 21% — rising to 32% among Gen Z and 28% of younger millennials (ages 24-31) — intend to donate more than they did last year.
The research also highlights the ongoing desire to support local communities, with 58% of consumers aiming to buy from local and independent retailers.
“While the anticipated increase in consumer spend will come as welcome news to retailers, our survey shows that the events of the past year are likely to affect the spending habits of different generations of people this holiday season,” said Jill Standish, a senior managing director at Accenture and head of its Retail industry group globally. “Retailers need to respond by keeping safety protocols in-place and tapping into the shopping temperament in each community they are trying to serve. This requires increased local decision-making assisted by analytics tools to spot changing market conditions and evolving patterns of behavior as they happen.”
In-store shopping returns – is most popular with digital natives – Gen Z
Despite the ongoing pandemic, comfort with in-store shopping is returning. More than half (54%) of people overall — and 70% of Gen Z consumers — plan to do most of their holiday shopping in-store this season, whereas, perhaps surprisingly, 54% of baby boomers anticipate doing most of their shopping online.
In addition, 25% of consumers overall — and 42% of young millennials — said that shared experiences such as cooking classes, carol singers and children’s play areas could entice them to shop in-store with one retailer over another.
“The events of the last year has compressed into a matter of weeks changes that would likely have taken years. For instance, the pandemic forced older generations to overcome their hesitancy to shop online, an ongoing trend identified by our findings. On the flipside, younger consumers – who are already comfortable online – appear to be seeking out services and experiences that go beyond shopping,” said Oliver Wright, a senior managing director at Accenture and head of its Consumer Goods & Services industry group globally. “Retailers and consumer goods companies must tap into these behavioral shifts and push forward with their reinvention in order to engage a diverse, multi-generational marketplace of millions of individuals.”
Shop early before it’s too late
The pandemic, coupled with the issues of supply and transportation is concerning one-third (34%) of consumers, who intend to shop earlier this season as they’re worried about not getting what they need in time for the holidays. Further, Black Friday and Cyber Monday are continuing to lose their shine, challenging retailers and brands to take a longer-term view of the season.
“The declining popularity of Black Friday, coupled with consumers starting their holiday shopping early, means that retailers and brands need to engage consumers throughout the season,” Standish said. “In addition, with many people still working from home, the ability to browse and shop online, as well as pick and choose how to obtain items, is much easier for consumers — and makes it that much tougher for retailers. This year, more than ever, having a handle on inventory and the surety of supply will matter to both the consumer and the retailer.”
Consumers prioritizing time and money on experiences
Americans will be redirecting some of their spend from physical gifts to experiences and services, but this is most pronounced among the younger generations who are more likely to be travelling, spending time socially over the holidays, as well as seeking out and gifting experiences.
“We know that Gen Z and millennials hold the greatest purchasing power, and this presents a big opportunity for consumer companies to reach these cohorts,” said Emily Weiss, a managing director at Accenture and head of its Travel industry group globally. “Companies must tap into younger consumers’ desire for sharing experiences but also focus on their growing priorities, including health and safety, while providing an overall customer experience focused on ease and convenience.”
For additional insights and findings into the holiday trends, click here.