Deloitte’s 2023 Holiday Retail Survey Reveals High Spirits
The report predicts holiday shopping will exceed pre-pandemic spending for the first time.
Shopping trends for the 2023 holiday season reflect a return to pre-pandemic norms — an opportunity for a jolly season for both consumers and retailers, according to Deloitte.
For the first time, Deloitte's research shows holiday spending is poised to surpass pre-pandemic levels with consumers surveyed expecting to spend an average of $1,652 (representing a 14 percent increase year-over-year). Consumers say they want to make this time memorable, and nearly all consumers surveyed (95 percent) say they plan to participate in the holiday season, up from 92 percent in 2022 and 88 percent in 2021.
Deloitte's report points out that nearly 30 percent of shoppers will be responsible for almost 70 percent of the holiday spending this year with expectations to spend an average of $2,146 or more this season. Authors of the report also note that “these high spenders are focused on highquality products, while other shoppers focus on getting a great deal.”
Overall, as consumers plan for the holidays, budgets continue to be top of mind given inflation and student loan repayments. Seventy-two percent of consumer respondents say they expect higher prices, particularly in key categories including food and beverage
(86 percent), clothing and accessories (82 percent) and electronics and accessories (80 percent). With these perceived higher prices in mind, gift cards continue to gain momentum. The average consumer will plan to spend $300 on gift cards, up from $217 in 2022, which Deloitte's experts explained is likely due to consumers being able to feel that they are getting ahead of or hedging inflation.
“Although inflation shows signs of moderating, consumers have come to expect higher prices and are adjusting their holiday spending accordingly,” said Nick Handrinos, vice chairman of Deloitte LLP, and U.S. retail, wholesale and distribution and consumer products leader. “We expect to see shoppers make their lists and check them twice for deals, but a return to prepandemic spending levels shows promise for the season overall. Retailers can expect continued store growth as shoppers aim to maximize their budgets with their favorite retailer, presenting new opportunities to build loyalty.”
Notably, consumers told Deloitte they are slightly less confident in their ability to stay within budget this year (57 percent) versus 2022 (63 percent). To navigate inflation, consumers plan to buy fewer gifts (8 versus 9 in 2022) and add items to wish lists or online shopping carts to wait for deals (54 percent versus 48 percent in 2022).
Timing will also be important in behavior modifications that center around deal-seeking. Sixty-six percent of consumers say they will shop during the Black Friday/Cyber Monday weekend versus 49 percent in 2022. Almost a third of shoppers' budgets are expected to be spent in the last two weeks of November, with 78 reporting they will be shopping actively during that period.
“After several years of uncertainty, shoppers return to the familiar to make their holiday celebrations shine,” said Brian
McCarthy, principal at Deloitte Consulting LLP. “They plan to frequent their favorite retailers and focus their shopping during the traditional late fall period. With customers planning to shop fewer weeks, retailers have a shorter amount of time to gain consumers' attention, highlighting the importance of the November promotional events this holiday season.”
As consumers seek out deals, they also report preferences for in-store shopping that match 2019 levels, where 37 percent of the budget is expected to be spent in-store. This year only 28 percent of shoppers say they plan to leverage buy online pay in store (BOPIS) for gifts, down 35 percent from 2022). The top reasons consumers plan to spend more in-store are the ability to interact with the product (44 percent), to ensure quality (39 percent) and to avoid shipping costs (28 percent).
Consumers continue to value convenience for their holiday shopping, citing online-only retailers (63 percent) and mass merchants (53 percent) as the most preferred retail formats. Additionally, 80 percent of shoppers say they are willing to meet a minimum purchase to earn free shipping and are willing to spend $40 on average.
At the same time, loyalty matters, and 76 percent of consumers often or always shop at their favorite retailer. Additionally, shoppers who prioritize shopping sustainably for gifts report they will spend an average of 29 percent more than those who do not. More than half (55 percent) of younger consumers report they will purchase sustainable gifts this season, up from 48 percent in 2022.
Areas that will see cutting back to meet budgets include self-gifting (53 percent) — although, 75 percent say they are tempted to buy a gift for themselves mainly if it is practical or useful.