Financial pressures driving ‘creative pragmatism’ as US holiday shoppers look to make holiday dollars work harder, Accenture study finds
17th Annual holiday shopping survey highlights consumers plan to cut back on gift-giving to family and friends this holiday season
NEW YORK; Oct. 23, 2023 — As retailers gear up for the holidays — persistent inflation, high interest rates and income uncertainty are forcing many consumers to cut back, compromise and get creative with how, where and what they spend money on, according to the annual Accenture holiday shopping survey.
The survey of more than 1,500 US consumers found that when thinking about their finances ahead of the holiday season, six in 10 consumers already or plan to cut back on gift giving to close family and friends due to budget constraints, rising to 69% for extended family and friends . At the same time, just over half (52%) of consumers have already agreed – or plan to agree – not to exchange gifts with other adults.
“The current economic environment is having an impact on consumer confidence, which could lead to the emergence of much more discerning shoppers who can be described as ‘creative pragmatists’ – who, while grounded in the reality that they may need to cut-back in some areas are also finding innovative ways to stretch their holiday dollars even further, such as purchasing materials to make homemade gifts,” said Jill Standish, senior managing director at Accenture, who leads its trade practice retail globally. “Retailers must be willing to rethink the tried and tested strategies of the past and focus on gaining a more nuanced, data-driven understanding of each individual consumer and then use that insight to to help reduce shopping complexity, build trust and improve brand loyalty. “
Financial pressures influence purchasing decisions
With less than 1 in 5 (17%) consumers saying they feel optimistic about their finances this holiday season, the survey shows consumers plan to spend $591 this season, up 5% on average – little from last year. Consumers over the age of 70 expect to spend $673, the highest among all age groups, followed closely by baby boomers (ages 59-69), who expect to spend $667.
“Our findings show that consumers are feeling the pinch in their personal finances this year — not helped by the emergency SNAP payments that played a significant role in supporting low-income households during the pandemic that is ending,” Standish said. “In times like these, providing consistent and clear communication about the information consumers need when shopping can make all the difference. This means being upfront about return costs, product availability and descriptions. In the longer term, this is an opportunity to build brand loyalty that can last beyond the holiday season.”
Another interesting shift that retailers may see this season is a potential reversal of the extended holiday shopping season, as consumers report that they plan to start buying from October through December.
Laurie Zumwinkle, senior managing director at Accenture, who leads the North American retail practice, said: “With consumer behavior constantly changing, retailers will need to demonstrate ever-higher levels of agility and responsiveness as they handle challenging headwinds. This includes the ability to fine-tune marketing and sales strategies on the fly, adapting them in real time as circumstances evolve. While some retailers are already pushing ahead with Black Friday-like marketing campaigns and sales, there is a distinct risk of a race to the bottom in pricing. Successful retailers will be those that pay even greater attention to customer data, ensuring that marketing and promotions are targeted at the customers and products for which they will generate maximum impact.
A creative—yet pragmatic—approach to holiday shopping
The survey also shows that while price (78%) and value for money (60%) top the list of the most important deciding factors for how consumers will shop and what they will spend money on this season, quality still has meaning for more than half of users (50%).
Many consumers seem to be exploring creative yet practical ways to make budgets stretch. For example, some consumers indicated they were willing to compromise on convenience, with more than half (53%) opting for in-store pickup over doorstep delivery if it saved them money. In addition, more than a third (39%) of consumers intend to consciously purchase items such as board games that they can enjoy all year round. This figure rises to 47% among young millennials (ages 25-31) and 45% among older millennials (ages 32-39).
“In a season that is particularly associated with nostalgia and tradition, retailers can take heart that consumers are still planning to spend this season.” However, the way they spend is likely to differ from years past. While some are undoubtedly taking steps to organize their seasonal shopping more carefully this year, others are focusing on quality and making conscious purchases of items they can enjoy year-round,” said Standish. “Regardless of why consumers choose how and where to spend this season, retailers can play an active role in creating a deeper connection with consumers while developing strategies to drive new revenue opportunities.” For example, they could develop strategies that help shoppers extend the life of the items they buy, or use past data on shopping habits and purchases to tailor promotions and marketing campaigns to individual customers with much greater accuracy. .
About the research
Accenture’s 17th annual Holiday Shopping Survey offers insights into consumer buying patterns over the festive period, providing an indication of retail performance expectations both on the high street and online at a key time for the sector. For this year’s study, Accenture surveyed a representative sample of 1,503 US online consumers, each of whom had purchased an item for personal use online or in a store in the previous six months. Respondents were split by gender and age group, with 15% Gen Z (ages 18-24), 13% younger Millennials (25-31), 15% older Millennials (32-39), 21% Gen Xers (40-55), 21% Baby Boomers (56-69) and 15% age 70+.
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