Holiday Shopping
This holiday shopping season is going to look a little different than years past. After constant economic challenges that have now become routine, people have finally found solid footing for the annual winter holiday frenzy. In the coming months, shoppers will be aiming for a “normal” gift giving season complete with more strategic shopping enabled by technology and a focus on smarter gifting experiences. The best part of this consumer confidence and positivity is that retailers, the economy, and the environment also stand to benefit.
Here are the top trends for 2024 holiday shopping and gifting:
Savvier shopping.
After years of economic uncertainty and holiday spending fatigue, consumers are itching for a less stressful holiday shopping season—particularly after what is expected to be an eventful and potentially exhausting election cycle. But there are still roadblocks. According to a recent Prosper Insights & Analytics survey, more than three quarters of respondents expect to see higher prices when shopping for the holidays this year.
Prosper – Do You Expect Higher Prices When Holiday Shopping?
In addition, more than half consider sales and promotions more important this holiday season compared to last.
Prosper – Are Holiday Sales and Promotions More or Less Important This Year Than Last Year
While consumers will continue to be more price-conscious, their holiday spirits won’t be dampened. Most will be circumventing financial challenges by turning to deals and discounts. Those efforts are becoming second nature, and shoppers are increasingly strategic about their approaches to holiday budgeting and spending. At a time when the Federal Reserve Bank of New York reports that Americans’ total household debt has risen to $17.8 trillion, a recent Prosper Insights & Analytics survey found that fewer than 7% of respondents planned to borrow money or go into debt to cover the cost of holiday gifts this year.
Prosper – What Doing To Cover Costs of Holiday Gifts?
“Despite the unrelenting economic headwinds of the last few years and continued concerns over inflation, Americans don’t plan to cut down on holiday cheer,” said Brett Narlinger, head of global commerce at global payments leader Blackhawk Network (BHN). “People will be smartly leveraging points to pay, actively seeking rewards for their purchases, and looking to loyalty programs to save money in the coming months. A recent Holiday Branded Pay Study conducted on behalf of BHN found that the top holiday shopping motivator is the announcement of sales and promotions, and nearly half of respondents plan to change their shopping behavior this holiday season to get the most value out of their spending—nearly a 10% increase from last year. Without a doubt, the season of giving will be alive and well thanks to these savvy shoppers.”
Tapping into tech.
As consumers expand their deal-seeking prowess across in-store and ecommerce channels, many will be leveraging technology to make their shopping and gifting season as seamless as possible. According to 2023 Post-Holiday Research conducted by Leger and commissioned by BHN, this year, about one in five shoppers surveyed reported planning to use artificial intelligence (AI) technology to find the best prices, compare brands and products, generate creative gift ideas, make shopping easier and faster, and find product recommendations. Younger generations are twice as likely as older generations to use this approach.
While many people still prefer shopping in-store, online shopping is closing the gap—particularly when it comes to gift cards. This holiday season more than ever, people will appreciate being able to do their holiday shopping from wherever they are thanks to the flexibility of online and in-app shopping. No crowds, germs, or trips to the mall or post office required.
People are also leaning on tech-enabled payments more this year. For example, younger generations will be using secondary payment types often. So beyond traditional debit/credit card and cash purchases, loyalty points, mobile wallets, PayPal, physical and digital gift cards, and buy-now-pay-later (BNPL) payment options will be more prevalent than ever.
Experience gifting.
“The holidays are a series of gift exchanges across a constellation of relationships and experiences,” says BHN’s Narlinger. “Between get-togethers with family, friends, extended family, office colleagues and even classmates, the number of times people are expected to share gifts is high—particularly among Gen-Z, who are twice as likely as Baby Boomers to be spending time at the holidays with friends. This winter shopping season, people are putting extensive thought and effort into every facet of gifting, including shopping experiences, gifting experiences and even gifts that offer recipients with experiences.”
No longer does the holiday shopping season revolve around a day or two of pinnacle savings opportunities (e.g., Black Friday, Cyber Monday). This year, particularly since there is a shorter holiday shopping window, people are kicking off their shopping early in a calmer way. This helps ensure they’re finding the right gifts for the right people at the right price via the right shopping experience. BHN’s Holiday Branded Pay Study found that about a quarter of holiday shoppers will look for deals and gifts between now and early November. Black Friday will kick off another wave of deal-seeking shopping, followed by the culmination of the shopping season in December.
According to the 2023 Post-Holiday Research, last year, one in five respondents went so far as to exchange and/or redeem their loyalty points to give others experience-based gifts. And the evidence showed that recipients appreciated these gifts. The study found that nearly 80% of respondents participated in gift exchanges, but there was a discrepancy in the types of gifts people wanted versus what they received. Overall, respondents shared they received too many physical gifts and would have preferred to receive more experience-based gifts and gift cards. It’s highly likely that those same consumers will be doing unto others and giving experiences and more gift cards that can help pay for experience since they crave them themselves.
Sustainability and transparency.
The demand for more sustainable products and gifts is likely to continue this holiday shopping season as consumers are increasingly drawn to brands with clear environmental practices; CapitalOne Shopping Research found that 89% of consumers have changed their shopping habits to be more eco-friendly. According to a recent Prosper Insights & Analytics survey, nearly a third of respondents spend more money with environmentally responsible brands—and younger shoppers are particularly keen to support those brands and leverage online search tools to vet them.
Prosper – How Engage with Environmentally Responsible Brands
In addition to buying physical gifts from businesses that are more conscious about the environment, consumers are likely to be scouring different ecommerce channels or digital gifting options that remove the need for shipping, handling, and other distribution costs. A highly popular choice will be egifts, as they check the box for shoppers who want to shop comfortably from wherever they want, prefer to skip excessive packaging without sacrificing the ability to personalize the gift, and want to give recipients the flexibility to choose what they actually want (empowering them to skip dreaded post-holiday return process one in five shoppers complete, according to the 2023 Post-Holiday Research).
Happy shopping!
The season of giving is no longer a few brief weeks in December, and consumers are already on the prowl for opportunities to stabilize the holiday chaos of the last few years. Shoppers are determined to spread holiday cheer via thoughtful, strategic, and smart gift giving without breaking their budgets. And in doing so, they’re demonstrating a powerful resiliency that will help protect the positive spirit of the season.