Dive Brief:
- Signaling shoppers’ budget concerns, a Gartner survey of 306 consumers during July found that more than a fourth (28%) expect to spend less this holiday season while 10% will spend more this year than in years prior.
- Among the factors driving purchasing decisions are price (65%), value (53%) and free shipping (51%). More than three-fourths of respondents said they anticipate the same or fewer deals compared to the 2021 holiday season, per the survey results.
- Though 28% of respondents said they aren’t looking for gift inspiration before shopping for the holidays, more than a third (35%) are relying on their friends and family’s wish lists, 22% will search on Google, and a fair number are using brand websites (18%), brand emails (11%) or catalogs (10%). Few respondents are relying on social media platforms like Instagram (7%), YouTube (7%), Pinterest (6%), Facebook (4%) and TikTok (2%).
Dive Insight:
Given current inflation concerns, price and free shipping are among the top factors Gartner survey respondents consider for their holiday purchases. An August Morning Consult survey of 15,000 U.S. consumers found that 85% of respondents cited inflation as the reason they changed their shopping habits. The survey found that 79% of respondents sought discounts, and 77% reduced their shopping.
“While consumers have increased their discretionary spending in the past few years, inflationary pressure is impacting their spending plans for this holiday season,” Kassi Socha, director analyst in the Gartner Marketing practice, said in a statement. “This hesitancy around budgets, coupled with new timing from consumers regarding their holiday shopping, will challenge marketers to have an always-on approach that will stress the need for omnichannel adoption.”
Though consumer spending has increased so far, it remains to be seen how much more consumers will spend this holiday season. The National Retail Federation predicted that consumer spending will rise to $10.6 billion on Halloween this year from $10.1 billion in 2021. And while Mastercard’s SpendingPulse report projects that U.S. holiday spending could increase 7.1% year-over-year, a Deloitte report predicted that holiday sales could grow between 4% and 6%, down from last year’s increase of 15.1%.
Leading up to the holiday season, retailers have begun offering early discounts and increasing employee headcounts as consumers gear up to pay more for fewer items. Target announced this month that it will hire up to 100,000 seasonal employees and is introducing its Deal Days promotions in early October. The retailer also partnered with FAO Schwarz to sell exclusive products from the iconic toy brand in Target stores and on the retailer’s website.
Similarly to Target, Walmart is also hiring more associates this year, but it only plans to hire 40,000 additional employees, more than 100,000 less than the company had hired last year. It also announced a new return policy for holiday purchases.
In addition to Target, Amazon also announced a deals holiday taking place in October. The e-commerce giant has begun introducing discounts for its members and unveiled a gift guide with products from brands like KitchenAid and Peloton.
