Higher-Income Shoppers To Drive Holiday Spending

Amid waning pandemic anxiety and stabilizing consumer sentiment, holiday spending is forecast to increase five per cent from 2020, with higher-income shoppers driving nearly all gains, says the ‘2021 Deloitte Holiday Retail Survey.’ The report shows that digital channel trends are here to stay, but some pre-pandemic behaviours are returning, such as experiences (including socializing, travel, and entertaining), which increased 15 per cent from 2020. Optimism among retail executives is strong, as seven in 10 expect consumers to spend more year over year. However, six in 10 retail executives are worried about receiving their holiday orders in time. Consumers are aware of these potential supply chain problems so 75 per cent say they will start their holiday shopping earlier this year. Consumers are also more worried about inflation than retailers. Seven in 10 consumers (68 per cent) expect higher prices this season while only five in 10 retail executives surveyed expect higher prices. The report says 2021 holiday spending intentions are approaching 2019 levels, signalling a return to the ‘next normal.’ However, there is a tale of two holiday seasons, with higher-income households planning to spend five times that of lower-income households. Indeed, the majority of this season’s gains will be driven by higher-income shoppers who expect to spend 15 per cent more than last year. Meanwhile, lower-income groups plan to spend 22 per cent less. Moreover, the percentage of overall consumers who do not plan to spend at all this season is 11.5 per cent, more than doubling from 2020 (4.9 per cent). Convenience preferences from the pandemic are sticking with digital trends including standard delivery (73 per cent), same-day or next-day delivery (47 per cent), BOPIS (buy online, pick up in store) (33 per cent), and curbside pickup (21 per cent) maintaining popularity.