October 23, 2020
Consumers prioritize holiday spending on family, friends
Purchasing gifts for friends and loved ones is a way for consumers to shift focus from the uncertainty and stress of the pandemic to celebrating the holidays and the promise of our return to a better tomorrow. In total consumers plan to spend $997.79 on gifts, holiday items such as decorations and food, and additional “non-gift” purchases for themselves and their families, according to the annual survey released by the National Retail Federation and Prosper Insights & Analytics.
“Consumers have demonstrated their resilience and adaptability throughout these extraordinary times,” said Matthew Shay, president of NRF. “Looking ahead to the holiday season, retailers will ensure that their stores are safe for both customers and employees as we all prepare to celebrate family and friends during this special time of the year.”
While overall spending in these categories is down by about $50 from last year, nearly all ($45) of the decrease comes from consumers’ hesitation to use seasonal sales and promotions to buy other, non-gift purchases for themselves and their families. Even still, consumer spending on gifts is on par with last year, decreasing by only about $8, while per person spending on other holiday items like decorations is actually up slightly. Expected spending remains significantly higher than the 5-year average for both those categories. The holiday season is top of mind, with 42% saying they plan to start their holiday shopping by the end of October and another 41% in November.
One in five (19%) holiday shoppers say that they typically travel for the holidays but will stay home instead this year. Over half (53%) of those who changed their holiday travel plans said they are likely to spend more on holiday items this year, specifically because they will not be traveling.
With holiday inventory and promotions starting even earlier than usual, consumers remain flexible with their holiday shopping plans. The vast majority admit they could be convinced to start shopping earlier than they typically do through incentives like holiday deals or to avoid crowds or the stress of last-minute shopping.
“Consumers are taking advantage of a variety of offerings from retailers this holiday season including earlier sales promotions and shipping options,”Phil Rist, executive vice president of strategy at Prosper said. “Consumers are focusing on making the holidays special for others but are playing it by ear when it comes to those ‘extra’ items they might get for themselves.”
As online sales have skyrocketed during the pandemic, it comes as no surprise that the majority (60%) of consumers say they plan to purchase holiday items online this year. Nearly all (91%) online shoppers plan to take advantage of free shipping, while another 44% plan to use buy online, pick up in store and 16% plan to use same-day delivery.
Other top holiday shopping destinations for consumers include department stores, mentioned by 45%, discount stores (43%), and grocery stores or supermarkets (42%).
The survey asked 7,660 consumers about winter holiday shopping plans. It was conducted Oct. 1-9 and has a margin of error of plus or minus 1.1% points.