Americans are looking forward to the holiday season this year, with many planning to spend the same or more compared with last year and support charitable organizations and their local communities, according to the 15th Annual Holiday Shopping Survey from Accenture.
Holiday spending is likely to rise this year, with U.S. consumers planning to spend $598 this holiday season, on average, compared with $539 last year. Most (71 percent) said they intend to spend as much or more than they did last year.
Older millennials, 32-to-39 years old, said they anticipate spending $705, on average, the highest among any age group.
The survey of more than 1,500 U.S. consumers found that 76 percent will look forward to spending time with loved ones, with 75 percent planning to buy gifts for family and 41 percent purchasing gifts for neighbors, colleagues and friends.
This “generosity of spirit” will likely extend outside the home, as 70 percent of respondents said they intend to make charitable contributions and 21 percent, up to 32 percent among GenZ and 28 percent of younger Millennials (24-to-31 years old), said they plan to donate more than they did last year during the holidays.
Accenture’s research also highlighted the ongoing interest of respondents to support their local communities, with 58 percent saying they would aim to purchase locally and from independent retailers.
“While the anticipated increase in consumer spending 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, senior managing director, Accenture and head of its Global Retail Industry Group. “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 Gen Z
Despite the ongoing pandemic, the survey found that comfort with in-store shopping is returning. More than half (54 percent) of respondents overall, and 70 percent of Gen Z, plan to do most of their holiday shopping in-store, whereas 54 percent of baby boomers said they plan to do most of their shopping online. In addition, 25 percent of respondents overall, and 42 percent of young millennials, said that shared experiences such as cooking classes, caroling and children’s play areas could entice them to shop in-store with one retailer over another.
“The events of the last year have 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 flip side, younger consumers, who are already comfortable online, appear to be seeking out services and experiences that go beyond shopping,” said Oliver Wright, senior managing director, 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 to engage a diverse, multi-generational marketplace of millions of individuals.”
One-third (34 percent) of respondents are worried about supply chain issues and said they intend to shop earlier this season. Black Friday and Cyber Monday continue 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 Prioritize Time And Money On Experiences
U.S. consumers will direct some of their spending from physical gifts to experiences and services, but this is most pronounced among the younger generations who said they are more likely to travel, spend time socially during the holidays and search for 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.”
Photo courtesy Target