Consumer Holiday Spending Behavior and Drivers in 2021
November 12, 2021
As we approach the upcoming holiday season, many questions remain about the impact of the pandemic on consumer holiday shopping behaviors and spending. According to the National Retail Federation, 2020 brought an increase in holiday spending due to a unique set of circumstances such as increased savings from lack of travel and other pandemic-restricted activities, as well as government stimulus packages. While the pandemic brought many changes to consumer behavior, some are temporary and some are showing more signs of permanence. The major points to consider in upcoming holiday shopping behaviors and spending include:
- Supply chain disruption perception and response
- The balance between in-store and online shopping
- The increase in value-driven spending
Supply chain perception and response
News of supply chain-related shipping delays has taken over leading into the holiday season and many have suggested earlier holiday shopping. A 12-month view of online and social media mentions of “supply chain” shows a 65% increase between the first half of this period and the second, with its peak beginning in September.
A representative sample of 1,000 US adults (18+) and 1,000 UK adults (18+) show that one in three in the US (33%) plan on purchasing their holiday gifts earlier than usual this year, and one in four (25%) in the UK indicated the same. US consumers are especially concerned – with 55% indicating they are at least somewhat concerned about the impact of the supply chain disruption on celebrating as usual this year, compared with 32% in the UK.
Consumers are also making alternative plans in case supply chain disruptions interfere with their gift purchasing. Forty-four percent (44%) of US consumers and 47% of UK consumers say if the gifts they want to purchase are unavailable through their typical avenues, they will resort to buying different types of gifts than originally anticipated. One in four US consumers (25%) and UK consumers (24%) say they will shop at smaller or local stores to get their holiday gifts. Some consumers will even consider buying less gifts – 19% of US consumers and 17% of UK consumers.
The balance between in-store and online shopping
It’s clear the uptick in online shopping accelerated by COVID-19 is here to stay, and shows signs of continuing to increase.
- Consumers will continue making online purchases. When asked in July, 38% of US consumers and 40% of UK consumers said they increased their online shopping in the past 12 months; and 91% of both US and UK consumers say these habits will remain the same or increase moving forward.
- Online retailers are the top location where consumers are planning on making their Black Friday purchases this year.
- This is also true for mobile purchases. A CouponFollow survey finds millennials make 36% of their total purchases using mobile devices. Social media will continue playing a vital role, not only in brand awareness, but also as a platform to make purchases.
However, as vaccination rates increase, foot traffic this holiday season will be on the rise. While data shows this significant increase in online shopping, some consumers still have a preference for and see benefits to in-store shopping.
- Consumers still see value in in-store shopping in order to physically see and touch a product in-person, find certain specialty items not available online, and enjoy in-store shopping as an experience in itself.
- Contrary to popular belief, younger generations are not trending towards online shopping. When asked in Q2 2020, 46% of US consumers aged 16-24 said they prefer in-store versus online shopping. This is higher than the 42% of those 25-34 that said the same.
The increase in value-driven spending
Now more than ever, consumers are driven to make value-driven purchases. The way a company or brand aligns with a consumer’s values in an authentic way is becoming increasingly important.
- About half of US consumers say that a brand or company showing support for people during the pandemic impacted their purchase decisions to some extent.
- This extends beyond the pandemic as well. Younger generations in the US and UK are more likely to say they think brands should be socially responsible, be eco-friendly, support charities, and support local suppliers.
- 78% of US consumers said that brands/companies have some level of responsibility in addressing issues of gender inequality.
- Consideration for sustainability is growing. This may be part of an emerging trend for consumers spending more money on fewer, better quality products.
- 52% of US and UK consumers said they would pay more for an eco-friendly product.
- Teens allocate 8% of their shopping time to secondhand, 51% of teens have purchased and 62% have sold something secondhand.
These unique circumstances will impact how consumers choose to spend this holiday season and into the future.
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TAGS: Consumer & Lifestyle