Black Friday is on the ropes but overall the holiday is expected to shape up well.
PricewaterhouseCoopers audit, tax and consulting firm breaks down the shift in shopping habits along with the spending projections, hot categories and delivery preferences of holiday shoppers in its 2017 Holiday Outlook report.
Through a poll of 2,395 consumers, the company found that only 19 percent will shop exclusively in store on Black Friday, while 30 percent will do the majority of their shopping online. Further, online devotees have an appetite for Thanksgiving day sales, with 28 percent of shoppers opting to fill their carts on the family holiday. That’s a 10 percent increase over last year.
And e-commerce isn’t the only reason Black Friday has lost steam. PwC said the continuous sales all through the season remove the urgency to shop on any one day.
Savings & splurges
With the economy doing well, low unemployment rates and subdued inflation, the scene is set for a positive holiday. The only concern is if shoppers recognize that they need to be more fiscally responsible than they’ve been thus far this year, the report said. PwC noted “real consumer spending has been growing by more than 1 percentage point greater than real disposable income.”
Last year, consumers spent an average of $1,189 each. This year, 83 percent are expected to meet or exceed that total. Of that, 56 percent will go toward gifts, 28 percent to travel and 16 percent to entertainment.
Respondents intend to be most generous with relatives, spending $680 on them on average. Expenditures on friends will be around $95, while gift-givers will also treat themselves to the tune of $360.
[Read more about consumer spending and how retailers are prepping for the holidays: Consumers to Shop In-Store This Holiday, But Will Retailers Be Ready?]
Apparel leads the top of gift-givers’ lists with 57 percent of those polled planning to buy from this category. Fifty-one percent will purchase gift cards, 43 percent toys and 33 percent personal electronics. Accessories trails at 29 percent.
Of those buying gift cards, 65 percent will be restaurant cards, 61 percent retailer cards and 41 percent Amazon-specific cards. Older recipients, Gen X and Boomers, are likely to be the most thankful for gift cards at 44 percent and 51 percent, respectively.
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High-income shoppers will drive most of the increased spending this season, reflecting their income gains. Though median household income is up to a 17-year high at $59,039, that won’t translate to more gift-giving among this group because it’s employment rates, not take home pay, that have increased. Shoppers who make less than $60,000 will skimp on gifts and entertainment and put more dollars toward travel. PwC anticipates gift buying to be down by 8 percent from $560 to $517 for folks in this demographic. The haves, on the other hand, are expected to spend 3 percent more on presents, hitting $822 for the category.
Generational divide
Consumers 35 and over will spend more than 60 percent of their budget on family, while millennials will only shell out 51 percent and Gen Z shoppers ages 17 to 21 are only planning to spend 36 percent on relatives. These mature Gen Zers do intend to splash out on their pets, spending more on them than any other demographic.
Millennials are hoping for experiences under the tree while the 17-to 21-year-old Gen Z demographic wants tangible items. More than 60 percent of the former group looks to Facebook for gift inspiration while 87 percent of the latter turn to social media.
Young Gen Z shoppers, ages 13 to 16, which PwC polled separately, are the most loyal to stores with 81 percent preferring to shop that way versus a 50/50 split for consumers above their age group. Of the 301 polled, 40 percent will shop solely in stores, and they’re expected to be in the mix on Thanksgiving and Black Friday.
While malls may have fallen out of favor with many, 60 percent of these youngsters selected it as their go-to shopping destination. Malls are even more enticing for them if they offer places to wait for an Uber.
More than 70 percent want some sort of personal electronic gadget in their stockings, 68 percent are hoping for clothes, and 43 percent prefer shoes.
The young Gen Z group is the most price sensitive with 63 percent saying price is the most important purchasing factor, though mature Gen Zers and millennials aren’t far behind at 59 percent and 62 percent each. This youngest group isn’t as demanding when it comes to deals though, with only 27 percent ranking it as the most important factor. That’s compared to 39 percent of millennials who are swayed by discounts.
Fulfillment findings
During the holidays, when shoppers need items to arrive on time, delivery windows are of the utmost importance. For 50 percent of respondents, packages must arrive between three and five days, while 39 percent expect goods in no more than two days. Urbanites are most demanding, with 33 percent preferring same-day delivery compared to 28 percent of their rural counterparts.
To feed this constant need for fulfillment, distribution centers and warehouses are springing up everywhere, employing nearly one million workers. That’s 30 percent more than five years ago.
Retailers are also getting creative about how packages are delivered, with Walmart even attempting to send orders via store associates on their way home. Unfortunately for them, 75 percent of those polled only want an official vehicle or person in uniform at their doorstep. Further, 50 percent want it to be a delivery brand they already know.