As the holiday season approaches, a significant shift in consumer behavior is evident, with nearly three-quarters of consumers opting to delay their holiday shopping in anticipation of discount shopping events such as Black Friday and Singles Day. These insights emerge from a comprehensive study conducted by Ernst & Young, surveying over 22,000 consumers across 28 countries, including economic powerhouses like the US, China, India, Brazil, Japan, and Germany.
The report sheds light on the evolving landscape of consumer spending, influenced by factors such as heightened levels of inflation, rising interest rates, and credit-card delinquencies, collectively impacting purchasing power. According to Jim Doucette, consumer products and retail leader at EY-Parthenon, these shifts reflect a broader trend of consumers becoming more conscious of their spending habits.
A staggering 80% of those surveyed express concerns about their financial situation, prompting a strategic approach to holiday spending. More than half of the respondents plan to reduce their overall spending to save money, emphasizing a growing awareness of economic challenges.
To navigate budget constraints, consumers are reevaluating traditional holiday activities. The study reveals that a significant number of individuals plan to cook and entertain at home, opting for cost-effective alternatives to restaurant takeout.
Kristina Rogers, EY’s global consumer leader, notes that consumers are continuously reassessing what they consider essential, with a discernible trend toward avoiding non-essential impulse purchases. This shift in mindset aligns with the broader economic uncertainties faced by individuals globally.
In the realm of retail, the study indicates a notable increase in online shopping preferences. Fifty percent of consumers state that they will shop mostly or exclusively online this season, marking a 16% rise from the previous year. However, this figure remains below the peak of 61% observed in 2020 during the height of the pandemic. In contrast, only 10% of respondents plan to exclusively engage in in-store shopping, reflecting a shift in consumer mobility preferences.
Regionally, the survey highlights distinct variations in holiday spending intentions. In the US and Europe, 39% and 35% of consumers, respectively, plan to spend less during the holidays. In contrast, China presents a different picture, with only 11% planning to reduce spending and a substantial 45% intending to increase their holiday expenditures.
As the holiday season unfolds against the backdrop of economic uncertainties, these consumer insights provide valuable perspectives for businesses and retailers seeking to adapt to changing spending patterns and align their strategies with evolving consumer priorities.