Deloitte Predicts 7 Percent Drop In Holiday Spending

Article From：SGB Media

 

 

Amid continued COVID-19 anxiety, shoppers plan to spend cautiously this holiday season, averaging $1,387 per household, down 7 percent from 2019, according to Deloitte’s holiday forecast.

 

Other key findings from the report:

 

Spending is expected to shift to non-gift purchases for celebrations at home ($435, up 12 percent) and socializing away from home. Travel is expected to decline 34 percent year-over-year.

Nearly 51 percent of holiday shoppers feel anxious about shopping in-store, and 64 percent of consumer’s holiday budget is expected to be spent online.

Contactless shopping experiences are in demand with 73 percent of consumers planning to have items delivered using traditional delivery vendors. Curbside pickup (27 percent) is expected to more than double from last year.

New shopping behavior favors efficiency as the average shopping window is expected to be 1.5 weeks shorter this year.

Deloitte said that despite its disruptive impact on consumer behavior and retail spending throughout the year, COVID-19 is not canceling the holiday shopping season, although it is changing how and where consumers will shop. For the past 35 years, Deloitte has tracked the holiday shopping period, examining consumer behavior and what retailers can expect from shoppers as they participate in holiday shopping. This year’s report, “2020 Holiday Survey: Reimagining Traditions,” surveyed 4,012 consumers nationwide. Conducted online between September 9-15, the report provides key insights into how COVID-19 is impacting shopping this holiday season.

 

Home For The Holidays Takes On New Meaning Asa Consumers Shift Spending

While the majority of consumers (71 percent) are in a similar or better financial situation than last year, nearly 1-in-3 (29 percent) said that their household’s financial situation is worse year-over-year. Given the financial uncertainty, 38 percent of consumers said they plan to spend less on the holidays, a level not seen since the Great Recession.

 

As consumers cut back on travel and other holiday experiences, they’re planning on celebrating the season at home and focusing their spending more on non-gift items like home, holiday furnishings and non-gift apparel.

 

Consumers are expected to spend $435 per household on non-gift purchases this holiday season, accounting for nearly a third of household holiday spending and representing a 12 percent increase from last year;

Travel and socializing away from home is expected to decline 34 percent year-over-year, to $260 per household; and

Spending on gifts and gift cards is forecasted to be $487 per household, a decline of 5 percent since 2019.

Contactless Gaines Importance As Consumers Seek Safety And Convenience

Ongoing anxiety spurred by COVID-19 continues to compound consumers’ shift from in-store shopping to contactless options. More than half of consumers (51 percent) are anxious about shopping in-store during the holiday season due to COVID-19, and 49 percent won’t return to pre-COVID-19 shopping behavior until a vaccine is available.

 

Among those who plan to shop predominantly online, nearly two-thirds of consumers will shop online to avoid crowds (65 percent), because they prefer the convenience of shopping at home (64 percent) and want to take advantage of free shipping or delivery options (60 percent);

More than two-thirds (69 percent) of consumers noted that they prefer shopping at a store closer to home, and 64 percent of their shopping budget will be spent online during the holidays;

As consumers seek out safe and convenient options, 35 percent of shoppers indicated a preference for buying online and pick-up in-store (BOPIS) and the use of curbside pick-up (27 percent), which is expected to more than double from last year;

Free return shipping is expected to be in high demand as 70 percent of consumers prefer a retailer that offers this option to make product returns convenient; and

While safety and convenience are important, a “great deal” continues to win over shoppers, with 61 percent of consumers noting its relevance in selecting a retailer.

“In this season of uncertainty, price, value and convenience continue to be top considerations for consumers as is the desire to get creative with how they celebrate the season with family, friends and pets no matter the circumstances. As travel spend declines, retailers will likely benefit and should receive a higher percentage of total holiday spend. The key for retailers is to stay flexible and offer options that appeal to consumers’ changing behaviors and address their evolving needs. Those that do will likely be better positioned for a bright holiday season,” said Rod Sides, vice chairman, Deloitte LLP, and U.S. retail, wholesale and distribution leader.

 

Consumers Plan To Shop Fewer Days This Holiday Season

Consumers plan to complete their holiday shopping in about 5.9 weeks, which is 1.5 weeks shorter than prior years, as they plan to avoid crowds, shop closer to home, shift purchases online and maintain flexibility in their personal budgets.

 

Sixty-one percent of consumers plan to begin shopping before Thanksgiving, with an expected average spend of $1,537 per household;

Thirty-nine percent of consumers plan to begin shopping on Thanksgiving or later, with an expected average spend of $1,149 per household; and

Consumers who plan to shop on major event days plan to spend more than the average shopper; and, consumers of all age groups are likely to rely more on Cyber Monday (29 percent) than Black Friday (24 percent).

Consumers Hand An Extra Stocking For A Pet — And Themself

While gift cards (48 percent) and clothing (43 percent) are among the top gift items this holiday season, more than 30 percent of the holiday budget will be on non-gift items.

 

As consumers look for items to purchase for themselves, 45 percent will wait for holiday sales to buy big-ticket items for the household;

Consumers plan to stay close to home and spend on food (30 percent) and beverages (33 percent);

As COVID-19 has motivated families to adopt a pet, half of the consumers (50 percent) plan to spend an average of $90 on pet food and pet supplies this holiday season; and

Pet stores (49 percent) are one of the most preferred retailers for pet purchases, followed by online merchants (17 percent) and mass merchants (15 percent).

“More than ever, shoppers are looking for safe and convenient ways to keep the season fun and festive. As a result, more shoppers are turning to contactless shopping options like home delivery and curbside pickup for safety and convenience. This holiday season is going to test even the best supply chains and logistics. Retailers who successfully address last mile requirements this season will likely be what they find in their own holiday stocking,” said Stephen Rogers, executive director, Deloitte Insights Consumer Industry Center, Deloitte LLP.