Consumer holiday spending set to increase for 2018
Social media will play a big role in holiday shopping
US consumers say they expect to spend more money on holiday shopping in 2018 than in 2017, with millennials being most likely to be the biggest spenders, according to results of the '12th Annual Holiday Shopping Survey' from Accenture.
The online survey of 1,500 U.S. consumers found that Americans will spend $658 on holiday shopping this year, on average, compared with $632 in the 2017 survey. Nine in 10 respondents said they plan to spend as much or more than they did last year - 53% and 36%, respectively - with only 11% planning to spend less. Older millennials will spend $779, on average, while nearly four times as many younger millennials compared to baby boomers (49% versus 13%) said they plan to spend more this holiday season.
The research also found that retailers' inclusion and diversity practices - with regards to age, gender, ethnicity and disability etc. - are playing a role in millennial shoppers' purchasing decisions.
The findings suggest that if a retailer is not authentically committed to prioritising inclusion and diversity, millennials are likely to take their money to a competitor who is inclusive:
- 54% of younger millennials surveyed believe that retailers have a responsibility and duty toward addressing wider social and political issues with regards to diversity.
- 51% of younger millennials are more likely to shop at a retailer that demonstrates awareness of such issues.
- Millennials are also more likely to choose one brand over another if that brand demonstrates inclusion and diversity in terms of its promotions and offers (cited by 70% of younger millennial respondents and 69% of older millennials), their in-store experience (66% of younger and 72% of older millennials), their product range (68% of younger and 70% of older millennials), and their environmental awareness (61% of younger and 57% of older millennials).
- 31% of younger millennials see diversity in the workplace - with regards to staffing, as an important attribute when it comes to deciding where to shop.
"Our research suggests that the millennial generation has high expectations when it comes to retailers' commitment to inclusion and diversity, and those values are influencing their decision-making in choosing one brand over another," said Jill Standish, senior managing director and head of Accenture's Retail practice. "National and multinational retailers serve diverse customer bases, so they need to position the brand accordingly - its messaging as well as its product selection. That will require not just more local decision-making, but also assistance from analytics tools that enable retailers to build a granular picture of their customers."
Among the survey's other key findings:
- With growing consumer confidence, shoppers are less price-sensitive. Consumers appear less concerned with the economy and their overall financial situation than they were last year - with one-third less likely (15%, versus 23% last year) to cite "a concern about the economy" as a factor negatively affecting their holiday shopping this year. They were also less likely to cite "healthcare costs," "mortgage payments," "the prospect of higher taxes," and "a recent job loss or the fear of losing their job". This could be one reason why fewer shoppers plan to take advantage of retailers' cost-savings programs or benefits - such as loyalty programs, on-the-spot competitor price-matching, special e-mail offers, Amazon Prime Day, and deal sites such as Groupon or Living Social. In addition, the number of respondents who said they would buy all their gifts in one place even if it meant paying more increased 7 points, to 32% this year.
- Service and/or "experience" gift-buying is on the rise. The research identified a growing trend away from product gifts such as toys, clothes and household appliances and toward "experience" gifts such as travel, dining out, concerts and the theatre, as well as toward "services" gifts such as lawncare, home cleaning and spa treatments. In fact, the number of shoppers who said they plan to buy physical products as gifts this year dropped 11percentage points from last year, to 73%, and the number who said they planned to buy experience or service gifts increased 5percentage points, to 49%.
- Social media is growing as a shopping platform. The use of social media platforms for holiday shopping is growing rapidly. The percentage of respondents planning to use social-media sites for their holiday shopping this year nearly doubled, to 15% from 8% last year. In addition, the percentage who said they check Instagram before looking or buying elsewhere online more than doubled, to 14% from just 6% last year.
"Social media continues to be a real disruptor in targeting today's consumers, who are spending a great deal of time in these channels and naturally want to be able to purchase directly, through the click of a button," Standish said. "Now, more than ever, it's imperative for retailers to further rethink and redesign their digital shopping capabilities and methods so they can meet customers on their terms."
Food quality matters
This year for the first time, Accenture's survey included questions related to food shopping for the holidays. A key finding was that quality matters, and shoppers are willing to pay more for it. Six in seven shoppers (86%) cited quality as "important" or "very important." In addition, consumers are also likely to "trade up" when shopping for food this holiday season, with more than half (54%) likely to shop from a high-quality retailer and nearly as many (48%) likely to buy premium brands instead of the market's own label.
When asked to select the factors that influence their purchases when shopping for groceries during the holidays, respondents most often cited "trust of the grocery provider and its products and services" - with 82% of respondents ranking it as one of the top three factors - followed closely by "offers best range of options so you can buy majority of items in one place" (78%). More than two-thirds (69%) of consumers cited convenience/location of the physical store as the key factor that would inspire them to purchase from a grocery provider they don't normally go to.
Home for the holidays?
The theme of "home for the holidays" seems to ring true, with more than one-third (35%) of survey respondents planning to host more holiday gatherings this year than last year. Millennials are leading the holiday hosting trend, with younger millennials (ages 21-27) 50% more likely than baby boomers to say they plan to host a Christmas meal or party (60% versus 40%) and to host a Thanksgiving meal (62% versus 41%) - and more than four times as likely as baby boomers to say they're planning to host more holiday meals this year than last year.
This might explain why they're also more likely to trade up on the quality of the food brands they buy and the grocers from which they buy, as well as why they're more likely than other age groups to purchase from a grocer they normally don't shop at if that provider offers access to food at different stages of preparation (from raw ingredients to chopped-and-diced ingredients to ready-to-eat products).
"Holiday meals have historically been how we show we care for our loved ones," said Standish. "It's positive to see millennials, with their significant purchasing power, taking a greater interest in hosting these important holiday meals at home. And what an opportunity for grocery retailers to meet this generation of shoppers. If done right, it might be the start of a relationship that will last all year and beyond."
Sources: Accenture / The Marketing Factbook.
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