Consumers are planning to increase holiday spending by 8% in 2024 compared to the previous year, with an average budget of $1,778 per person, according to Deloitte’s 39th annual holiday retail survey. While optimism about the economy is driving this increase, shoppers are also grappling with persistently high prices, fueling demand for deals and nontraditional holiday activities.
The survey, which polled over 4,000 U.S. consumers, highlights a notable shift in spending priorities. Although retail categories like gifts remain central, spending on experiences—such as travel, events, and social gatherings—is expected to rise 16% year-over-year. In contrast, gift spending is projected to remain flat, reflecting changing consumer preferences.
Bargain Hunting Shapes Shopping Behavior
Seventy-eight percent of respondents plan to shop promotional events in October and November, marking a significant jump from 61% in 2023. Retail executives noted that early deals are effectively pulling sales forward, creating a new norm in the holiday shopping calendar. Thanksgiving week remains pivotal, with 68% planning to shop during Black Friday and Cyber Monday sales.
Deloitte’s findings underscore growing frugality among consumers, regardless of income levels. Seventy percent expect higher prices on holiday goods, prompting behaviors such as trading down to lower-cost brands (62%), shopping at more affordable retailers (48%), and opting for private-label or imitation products (40%).
Experiences Outshine Traditional Gifts
Spending on experiences is forecast to reach $735 on average, narrowing the gap with retail spending, which is expected to total $1,043. This reflects a continued post-pandemic rebound, with experiential participation nearing pre-2020 levels. Notably, younger generations are driving this trend, with experiential gifts gaining favor over physical ones.
Despite the focus on experiences, traditional gifts such as clothing and food remain popular, though spending on gift cards and electronics is expected to decline.
Challenges and Opportunities for Retailers
Deloitte’s report also points to a potential loyalty crisis. Nearly half of consumers are willing to switch brands or retailers for better prices, a trend that could erode traditional brand loyalty. Retailers are advised to enhance loyalty programs and embrace omnichannel strategies to address these shifts. Smartphone and social media shopping are particularly prominent among Gen Z and millennial consumers, signaling the importance of digital engagement.
The insights align with broader industry trends, where value and convenience have become critical. For marketers, this data provides a roadmap for tailoring campaigns and promotions to a cost-conscious but experience-seeking audience.
Looking Ahead
With a steady rise in holiday budgets and an evolving landscape of consumer preferences, marketers and retailers face both challenges and opportunities. Understanding the nuances of these behaviors will be essential for capturing consumer attention and driving engagement in a highly competitive season.