Consumers plan to spend this holiday—but not at full price.
Shoppers intend to spend an average of $675 snapping up gifts this year, up from $627 in 2018, and many are looking for major price reductions, according to a survey by The Conference Board field by Nielsen in October. More than one-third to purchase a minimum of half of their gifts marked down, the survey revealed.
About half of consumers said they plan to increase their spending on holiday gifts this year, and more than than two-fifths (41 percent) will be putting fingers to keyboard to summon up the goods on their list.
“Consumers are gearing up for the holidays, with signs indicating they will not reign in their spending,” Lynn Franco, senior director of economic indicators at The Conference Board, said. “Consumer confidence is at historically strong levels, the job market remains solid, and the economy is in a record-breaking year of expansion.
“Retailers should expect strong demand this season,” she added. “However, as we have come to expect, consumers will be discerning when spending. Most will expect bargains, comparison shop, and wait up to the last minute for steep discounts.”
Projections for holiday retail sales are ticking up from initial estimates. The National Retail Federation early last month predicted an increase of between 3.8 percent to 4.2 percent, while later in October retail research firm Customer Growth Partners said it is forecasting a 5 percent growth rate. On Thursday, KPMG also said that it believes holiday spending will rise by 5 percent.
“Retailers of all sizes, categories and channels will compete fiercely during the lucrative 2019 holiday shopping season by offering early sales to seamless in-store and online customer experiences,” said Scott Rankin, a principal at KPMG and Consumer and Retail Strategy practice leader.
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“Although shoppers will make the most of their purchases online, in-store shopping remains significant this season, with mass merchants being particularly strong,” he added.
One in five holiday shoppers has already started eating into the budget set aside for seasonal spending. The majority of shoppers (57 percent) will begin gathering gifts before Black Friday, while high-value spenders who budget at least $1,000 for holiday are–at 69 percent–more likely than other shoppers to make purchases in October and November.
KPMG believes shoppers will spend in three key categories for holiday: apparel and accessories (65 percent), electronics (52 percent) and toys and children’s products (49 percent). Consumers point to price (81 percent) as the biggest driver in the decision-making process, while free shipping (59 percent) factors in heavily, too. Promotions (49 percent) can also sway shoppers toward a purchase.
This week, Deloitte, which last month projected holiday sales to rise 4.5 percent to 5 percent, said that experiences and celebrations will gobble up the bulk of holiday spending, at an average of $596 per household. That includes entertaining at home and traveling or socializing at fancy fetes away outside the abode.
Perhaps more interesting is that 61 percent of consumers say they are willing to share personal information in exchange for a deal of some kind, whether a promotion or discount. And more than one-third of consumers, at 34 percent, said they would share their data with retailers to help resolve an issue related to a product or service faster.
But most respondents are concerned about the security of their data, with 79 percent anxious about shopping with retailers that have suffered multiple or recent data breaches and 70 percent said they would be more comfortable if they had more control over their sensitive personal information.
And although consumers have more delivery options than ever before, the Deloitte study noted that standard delivery remains the preferred method of shipping, with 62 percent planning to opt for this fulfillment method over the year-end period.
Just 17 percent of consumers said they plan to use same-day delivery, while even less (8 percent) plan to take advantage of a delivery locker to securely retrieve holiday order at their convenience. Separately, the U.S. Postal Service said it is ready to deliver more than 28 million packages every day between Dec. 16-21. The USPS is projecting 800 million package deliveries between Thanksgiving and New Year’s Day, and will expand its Sunday delivery option beginning on Nov. 24.