In addition, consumers are factoring in inflation, with three-quarters expecting higher prices year-over-year (YoY). Strong spending from the $50K–$99K and $200K+ income groups was also noted, according to the 2023 Deloitte holiday survey.
Consumers in the US are set to spend an average of $1,652 this holiday season, exceeding pre-pandemic levels.
With 95 per cent planning to purchase, shoppers are considering higher inflation rates. Notably, higher-income groups are driving robust spending.
Trends are stabilising, but economic concerns persist, leading some to reduce expenses.
Although many shopping trends are finding equilibrium this year, there are still cracks in the foundation. Savings rates have dwindled, and 17 per cent of respondents say they have student loans to start repaying this fall, causing some to cut back on holiday expenditures.
For retailers, a winning strategy may come down to driving value around key promotional events for inflation-wary customers. Expected participation rates for promotional events are robust, with a quarter planning to shop on October promotional days and 66 per cent—versus 49 per cent in 2022 planning to shop the week of Black Friday-Cyber Monday (BFCM). The promotional timing will be crucial as consumers intend to wrap up their shopping in just 5.8 weeks—a timeframe that has shrunk from 7.4 weeks pre-pandemic.
Holiday spirit (and spending) has rebounded; consumers expect to spend $1,652, surpassing pre-pandemic levels for the first time. As consumers grapple with inflation expectations, they plan to spend 14 per cent more YoY. However, the compounded annual growth rate has increased a modest 2.5 per cent since 2019.
Even as the economy continues its uncertain trajectory, consumers are looking to splurge on the holidays this year and make the season memorable. Many trends, including spending, have normalised or surpassed pre-pandemic levels, indicating consumers may be ready to put pandemic restraints behind them.
As consumers look to put the fun back in festivities, three factors have contributed to the uptick in spend: Consumers are participating at a higher rate (95 per cent versus 92 per cent in 2022 and 88 per cent in 2021); they’re expecting higher prices (72 per cent); and the $50K–$99K (+26 per cent) and $200K+ (+22 per cent) income groups are splurging.
The $50K–$99K and $200K+ income groups plan to invest heavily in non-gift items after showing restraint the past two years. Retailers will have opportunities to appeal to these groups as they restock holiday decorations, furnishings, and holiday apparel.
With consumers expecting higher prices, they are making adjustments to stretch their budgets. They plan to buy fewer gifts—eight versus nine in 2022, spend more on gift cards—$300 versus $217 in 2022, and pounce on promotional events, with 66 per cent—versus 49 per cent in 2022 intending to purchase during the BFCM week.
With consumers on the hunt for a bargain, retailers’ best opportunities for gains may occur around promotional periods, especially as consumers only plan to shop 5.8 weeks this year, down from 7.4 weeks pre-pandemic.
Fibre2Fashion News Desk (NB)