Although Covid-19 continues to make its effects felt in the marketplace, results from the Deloitte 36th annual Holiday Retail Survey indicate that consumers will spend an average of $1,463 per household in the festive season this year, up 5% from 2020.
Although they have resumed some peak pandemic behaviors, consumers are citing a desire to spend on experience, including socializing, travel and entertaining. The intention to spend on experiential services gained 15% from 2020 to $536 per household or a bit more than one-third of holiday spending. Consumers surveyed have more concerns about inflation than do retailers, with 68% expecting higher prices this holiday season.
That being said, 2021 holiday spending intentions are approaching 2019 levels, signaling a return to something like a normal market environment. However, higher-income households plan to spend five times more than lower-income households. Higher-income shoppers are budgeting to spend 15% more than last year, at an average of $2,624 per household, while members of lower-income groups plan to spend 22% less, at a $536 average per household, according to the Deloitte study. The proportion of consumers who do not plan to spend at all this season is 11.5%, up from 4.9% in 2020. Two-thirds of the non-spender group are from lower-income households versus 12% from higher-income households.
In the end, though, spending will increase across categories with 45% of households planning to spend the same or more on the holidays.
Consumers expect to spend $501 per household on gifts, the survey indicated, an increase of 3% from 2020, while non-gifts purchases will total $426 per household. In-store spending should rise to 33% in 2021 from 28% in 2020, the study suggested, but down from the 36% seen in 2019. The proportion of consumers who are anxious about shopping in-store during the holiday season due to COVID-19 fell to 40% from 51% in 2020. Three out of four worry about stockouts. Even with some recovery to in-store spending, digital continues to gain, with online spending expected to rise to $924 from $892 in 2020, the Deloitte study suggested.
Four in 10 retail executives expect double-digit online channel growth, Deloitte pointed out.
In considering what they would like in the holiday season, 55% of consumers responding to the survey said they want simplified shopping citing online. At 51%, consumers cite mass merchants as their top holiday shopping channel. When they look forward to digital shopping in the holiday season, 73% of consumers plan to use standard delivery, 47% plan to take advantage of same-day or next-day delivery, 33% plan to tap buy online, pick up in-store, and 21% plan to use a curbside pickup. In their shopping, 28% of consumers plan to leverage social media to browse products, at 56%, read reviews or recommendations, at 53%, and discover promotions, at 50%. In addition, 52% of consumers will leverage influencer-generated content for shopping inspiration.
Retail executives told Deloitte they are placing orders with confidence that consumers will be spending, with 33% saying that holiday order volumes have grown by double digits year-over-year.