According to a survey of 302 consumers conducted in June by Gartner, Inc., only nine percent of respondents said they plan to spend more this holiday season than in 2022, with 28 percent saying they will spend less and 63 percent saying they would spend the same.
“This is concerning given that consumer spending during the 2022 holiday season did not meet industry projections,” said Kassi Socha, director analyst in the Gartner Marketing practice. “Annual growth was attributed to higher prices on the part of retailers combating inflation, not an increase in consumer discretionary spending.”
The survey showed that 19 percent of consumers said they would begin their holiday shopping in October, 29 percent would start in November and 10 percent would wait until December. Another 19 percent said they shop year-round, up from 16 percent in 2022—a trend Gartner sees growing, with 30 percent of consumers shopping for holiday year-round by 2026.
“Retailers have continued to expand their year-round promotional calendar, and, in turn, consumers have followed their lead,” said Socha. “Branded summer sales are becoming more common, and while retailers don’t need to hang snowflakes in July to capture consumer attention, they should increasingly take holiday shopping into account beyond the fourth quarter of the year.”
Market Same-Day Services, Not Just Free Shipping
According to the survey, free shipping is no longer a differentiator but a consumer expectation, according to respondents. Behind price, respondents noted free shipping (45 percent) as one of the top drivers influencing their purchasing decision, followed by value (35 percent), promotions or deals (33 percent), selection of gifts (24 percent), and ratings and reviews (17 percent).
Though most respondents said they planned to continue shopping online for their holiday purchases, 16 percent said they would shop more online than in-store this holiday, compared to 21 percent in 2022. Gartner suggests that retailers with physical stores should market more than free shipping. Almost one in three respondents intend to use hybrid, same-day delivery or expedited shipping when shopping for holiday gifts.
“While CMOs need to ensure digital commerce success during the holiday season, brick-and-mortar store marketing should not take a backseat,” said Socha. “Marketers and advertisers have a critical opportunity to prevent further decline of store profitability and, in some cases, drive profitable growth by leaning into the competitive advantage that their stores have compared to digital commerce experiences: faster and more efficient fulfillment.”
For Younger Consumers, Compete on ESG Progress
Gartner’s survey found that younger respondents are more likely to prioritize shopping with companies that demonstrate social purpose, with 13 percent saying they would shop with environmental, social and governance (ESG) factors in mind as “most important” and locally made or from a brand owned by a member of a historically underrepresented group are “more important” than shopping with a retailer that offers expedited shipping.
“Marketing on cause is not without potential peril,” said Socha. “Retail CMOs concerned about taking a strong sociopolitical stance and risking brand reputation in their winter holiday marketing should ensure it will be perceived positively and authentically by target consumers, and ensure preparedness if consumers react negatively.”