According to Deloitte’s latest holiday retail survey, the 2024 holiday season will be at least a bit more festive compared to last year. Although many consumers continue to express financial stress, the company’s data found that consumers plan to spend an average of $1,778 this holiday season (up 8 percent compared to 2023) and average planning to purchase nine gifts.
The consumer, said Deloitte’s research, is overall optimistic. Across all consumers, 43 percent said they expect the economy to improve this year up 9 percentage points from last year’s survey.
With spending projected to be slightly up during this important shopping season, Deloitte’s experts said that retailers are not completely out of the woods when it comes to shoppers’ focus on finding the best deals to maximize their budgets. Shoppers will continue to choose value over loyalty with 62 percent reporting they will shift brands if the preferred brand is too expensive and 48 percent reporting that they will shop at more affordable retailers.
“Despite expectations of higher prices, all income groups are optimistic that the economy will improve next year and are willing to spend on delivering holiday cheer,” said Stephen Rogers, managing director at Deloitte Insights Consumer Industry Center, Deloitte Services LP. “Experiences are expected to fuel holiday spending. To fund holiday experiences, value-seeking consumers plan to hunt for deals from stores and brands and trade down to stretch their wallets, keeping spending on overall retail categories flat year-over-year.”
As consumers prioritize value, 70 percent of surveyed consumers said they expect higher prices (aligning with findings in 2023 and 2022), indicating ongoing stress between wanting to be festive and wanting to be financially savvy. Shoppers who plan to buy gifts for themselves this year dropped to 32 percent, compared to 48 percent last year, with an average estimated spend of $250. This self-gifting will primarily go to clothing and accessories (63 percent), followed by electronics and accessories (34 percent), health and wellness (32 percent) and experiences (22 percent).
Notably, self-gifting is higher among shoppers in younger generations with 47 percent of Gen Z telling the company that they will self-gift and 32 percent of Millennials planning to spend on experiences for themselves.
When shopping, consumers told the company they will seek quality, great deals and variety when holiday shopping, citing online-only retailers (71 percent) followed by mass merchants (55 percent) as the most preferred retail formats. Black Friday and Cyber Monday are expected to be strong promotional events, despite heightened interest in October promotional events (38 percent). While younger and higher income groups are expected to participate the most in Thanksgiving week promotions, a total of 68 percent of holiday shoppers plan to shop during Thanksgiving week to take advantage of deep discounts. Eighty percent of promotional shoppers said they plan to shop during the Thanksgiving week.
Importantly, Deloitte’s report points out that multichannel presence continues to be a tablestakes for retailers to reach shoppers — especially as younger generations gain purchasing power. Deloitte’s data found that 48 percent of shoppers plan to shop on smartphones and 13 percent plan to purchase on social media. Unsurprisingly, Gen Z shoppers embrace these shopping channels more than older consumers with 58 percent planning to shop on their smartphone and 20 percent planning to buy gifts on social media.
Overall, retail spending is expected to remain nearly flat year-over-year, still accounting for 59 percent of the average holiday spend, however, consumers report a 3 percent decrease in spending on gifts vs. non-gift purchases year-over-year. Spend will likely go to experiences like travel, hosting gatherings or attending holiday activities.
Expressing enthusiasm for wanting to spend the holidays with loved ones this year, a fourth of consumers said they plan to host a holiday gathering, invite an average of 10 guests and spend an average of $261. To offset costs, 47 percent said they would ask guests to bring food or beverages while 31 percent said they would opt for more intimate gatherings.
“This holiday season, consumers plan to prioritize celebrating with friends and family through experiences,” said Brian McCarthy, principal at Deloitte Consulting LLP. “To do so, they are finding ways to make their dollars go further on the gifts they want to give and the events they want to experience. With consumers leaning more into experiences and continuing to search for value, retailers have the opportunity to attract shoppers and better connect with customers by focusing on loyalty programs and offering unique incentives.”
