If you’re planning to spend less on gifts this holiday season amid inflation pressure, you’re not alone. U.S. consumers are expected to spend less this holiday shopping season as “price-consciousness has become a defining characteristic of consumer behavior,” a new survey showed.
Approximately 80% of consumers are expected to spend less this holiday season than in past seasons, according to the 2023 Holiday Shopping Trends Report, a survey of over 1,000 shoppers nationwide conducted by automation platform Celigo. The report states that “consumers are more price-conscious than ever before” as “a remarkable 77% of respondents expressed their intention to prioritize value and seek cost-effective options when making their holiday purchases.”
“As the U.S. holiday shopping landscape continues to evolve, price-consciousness has become a defining characteristic of consumer behavior,” the report concludes. This follows Kiplinger’s retail outlook, which predicts a cooldown in goods buying later this year.
Consumers are setting spending limits
Budgeting, like following the 50-30-20 budget rule, is a hot topic this year, with an “overwhelming majority” of respondents are setting spending limitations this year.
Of those surveyed, approximately 80% indicated that they are planning to spend less than $5,000 on holiday shopping this season, while 49% said they plan to spend less than $1,000 and 30% said they plan to spend between $2,000 and $5,000. However, the study adds that there remains a subset that’s willing to spend moderately on meaningful gifts and experiences.
Setting a spending limit before you begin shopping is a smart way to keep costs down. You can plan ahead to map out how much to spend on different people’s gifts and, from that, look for ways to cut back.
For example, if you’re habitually buying multiple gifts for grandkids that add up in costs, decide on an appropriate total amount to spend on that generation. Then, consider sending physical gifts to the grandkids you don’t see around the holidays and giving gifts of experiences that don’t cost much, like teaching a family recipe or visiting an intriguing local museum, to the grandkids you will see. Your kids might even thank you for not adding more clutter in their home.
Online shopping takes center stage
Online shopping will be the main channel for holiday shopping this year, according to respondents. A whopping 75% of consumers said they will rely on online shopping for most of their shopping this holiday season, and 65% will do all of their holiday shopping online.
The respondents cited product availability, speedy delivery, and convenience as the top reasons for choosing online shopping over shopping in physical stores. The report added that Black Friday and Cyber Monday are “diminishing in importance” and that nearly 50% of consumers plan to start their shopping as early as September.
Shopping small is getting big
Just over half of consumers prefer shopping at independent retailers because “they stock an array of distinctive products that may not be easily found in larger chains” and because smaller stores “often curate their inventory with a keen eye for quality and uniqueness,” respondents claimed.
The value of community connection was also important to consumers, with 41% of respondents citing this as a reason for shopping small this year.
“These establishments are deeply ingrained in the communities they serve, contributing to the local economy and building genuine relationships with customers by creating a strong sense of loyalty among their clientele,” the survey concludes.
At the end of the day, the holiday season is about finding ways to be together and making lasting memories with your loved ones — just keep reminding yourself of that when your grandkid says last year’s present came in a bigger box.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
Why You’ll Still Pay Oklahoma Grocery Tax
State Tax Oklahoma is eliminating state grocery taxes, but that doesn’t mean groceries will be tax-free.
By Katelyn Washington Last updated
Last-Minute Tax Savings Guide for 2023
Tax Savings April 15 is weeks away, so it's not too late to save your 2023 taxes.
By Sandra Block Published