This holiday may be festive and bright but it will also mark a turning point.
Even with predictions of solid holiday spending, the malls might be a bit more quiet this year, and they’ll have the Internet to thank. For the first time, shoppers plan to allocate more dollars to e-commerce than to store purchases over the holidays.
According to the 2017 Holiday Survey by Deloitte, which polled more than 5,000 U.S. consumers, the volume of online sales will put the season on a new course. That’s in addition to consumers’ desire for fun outings and events in lieu of boxes and bows.
Experiences & expenditures
Even with this shift, the consulting firm said the number of gifts shoppers intend to buy continues to be on an upswing from a low average of 12.8 in 2012 to 14.7 this year—though that’s still far short of the 2007 high of 23.1.
The majority of respondents (81 percent) feel their financial situation is better or the same as last year, up from 75 percent in 2016. Riding that sentiment, the firm reports 79 percent of consumers intend to spend an amount greater than or equal to 2016 holiday expenditures.
Once again, clothing topped the gift list for 49 percent of those polled, right alongside gift cards, beating out electronics (40 percent), games and toys (39 percent) and books (36 percent). Apparel and accessories combined will account for 25 percent of holiday gift budgets.
And people are not just spending on others. There’s plenty of revelry, entertaining and décor that will add to the holiday expenditures.
While Deloitte anticipates consumers will spend 35 percent of the projected $1,226 per person average on gifts and gift cards, another 11 percent will be spent on clothes for the purchaser.
That’s the good news.
The tougher reality is respondents plan “to spend more on experiences and celebrations than in the past. In fact, approximately one-quarter of survey respondents say they prefer to buy gifts that can’t be wrapped up in a bow,” the survey said. These consumers intend to focus on dinners out, trips and parties.
Among those still opting for tangible presents, traditional department stores, off-price retailers and outlets are all expected to lose share when compared to 2016. While mass merchants will also be down (1 percent), the channel still claims the No. 2 spot in top holiday destinations with 44 percent of shoppers planning to ring some register bells there. This year, the Internet is projected to best all other stores, with 55 percent of respondents planning to shop online, up from 45 percent last year.
Put another way, online spending will represent 51 percent of holiday expenditures, edging out in-store dollars, which will capture 42 percent of spend. Last year, both were neck and neck at 47 percent. If the projections are correct, 2017 will be the first time e-commerce wins the holidays.
More than 10 percent of online sales will be mobile, and Deloitte found that the probability of enticing shoppers into actually purchasing via their smartphones (rather than simply completing tasks like browsing, price checking or tracking orders) is 59 percent higher this year than last.
“Whether a retailer is online or store-based, their digital influence is one of the strongest cards to play this holiday season,” said Rod Sides, vice chairman, Deloitte LLP and U.S. retail, wholesale and distribution leader. “Even though 80 percent of people said they expect the majority of their shopping will fall in late November onward, decisions about where they’ll shop and what they buy will be largely determined by the digital interactions occurring now.”