According to Accenture’s Annual Holiday Shopping Survey, as merchants prepare for the holidays, many customers are being forced to make trade-offs, cut back, and be creative with where, when, and what they spend their money on. This is because of ongoing inflation, high interest rates, and unpredictable income.
Six in ten customers have either reduced or plan to reduce the amount of presents they give to close family and friends because of budgetary restrictions, a statistic that rises to 69% when considering extended family and friends, according to a poll of over 1,500 U.S. consumers conducted in advance of the Christmas season. Simultaneously, slightly more than half (52%) of customers have already decided—or intend to decide—not to trade presents with other adults.
Consumer confidence is being impacted by the current economic climate, which may lead to the emergence of more thoughtful consumers who could be characterised as “creative pragmatists”; these consumers are finding creative ways to stretch their holiday budgets while still being realistic about the need to make some sacrifices, like purchasing supplies for homemade gifts, according to Jill Standish, a senior managing director at Accenture who oversees the company’s retail industry practise global Retailers need to be open to reconsidering their tried-and-true tactics in favour of concentrating on developing a more detailed, data-driven knowledge of each unique customer. They can then use this understanding to assist simplify the purchasing process, foster trust,
Less than one-fifth (17%) of respondents indicated they were confident about their financial status heading into the holiday season. Meanwhile, consumers anticipate spending, on average, 5% less than they did the previous year—US$591—this season. The largest age group of consumers, those 70 years of age and above, expect to spend US$673. Baby boomers, who are between the ages of 59 and 69, are next in line with US$667 in expectations.
According to Standish, “Our research indicates that this year, consumers are experiencing financial pressure in their personal lives, which is not being alleviated by the fact that emergency SNAP benefits, which were crucial in helping low-income households through the epidemic, are ending. “At times like these, providing customers with the information they require to shop may make all the difference when it comes to consistent and straightforward communication. It entails being truthful about product availability, descriptions, and return policies. In the long run, this is a chance to boost brand loyalty that goes beyond the Christmas season.”
The potential reversal of the extended holiday shopping season, which customers indicate they anticipate to start from October to December, is another intriguing twist that businesses may witness this season.
“Retailers will need to display ever greater levels of agility and responsiveness as they navigate challenging headwinds,” stated Lori Zumwinkle, senior managing director at Accenture and head of the company’s Retail sector practise in North America. This involves having the flexibility to quickly adjust marketing and sales tactics as conditions change. Although some companies are already pushing hard with their marketing efforts and sales events akin to Black Friday, there is a real chance that prices will continue to drop. Retailers that focus even more on customer data and make sure marketing and promotions are directed towards the consumers and goods for which they will have the most impact will be the most successful.”
It seems like a lot of customers are looking for innovative yet doable methods to stretch their finances. For example, some customers said they would be ready to forgo convenience; if it means saving money, more than half (53%) would rather pick up the item from the shop than have it delivered to their door. Furthermore, over one-third (39%) of shoppers plan to purchase year-round enjoyment products like board games on purpose. For younger millennials (ages 25 to 31) and older millennials (ages 32 to 39), this percentage rises to 47% and 45%, respectively.
The Accenture 17th Annual Holiday Shopping Survey provides information on consumer purchasing habits over the holiday season and reveals expectations for high-street and online retail success at a critical juncture for the industry. In order to conduct this year’s study, Accenture polled 1,503 U.S. customers online who had made a personal purchase during the last six months, whether they did it in-person or online. The respondents were divided into gender and age groups: 13% younger millennials (ages 25–31), 15% older millennials (ages 32–39), 21% Generation Xers (ages 40–55), 21% baby boomers (ages 56–69), and 15% senior millennials (ages 70+) made up the respondents.
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