Gift cards look set to rank as the number one present this Christmas season expenditure as individual customers prepare to spend more than ever before on the festive season.
This year consumers plan to spend on average $1047.83 on gifts, food and decorations and cards, according to National Retail Federation’s recently released Christmas consumer survey.
Here’s an insight into where that expenditure will occur.
Good financial shape, big spending
The NRF’s annual survey of holiday season spending intentions indicates consumers are in good financial shape this year and are willing to spend more as a result.
The survey of 7782 adult shoppers found on average they intended to spend $1047.83 each, which is four per cent more than the $1007.24 spent on celebrating the festive season in 2018.
“Consumers are in good financial shape and willing to spend a little more on gifts for the special people in their lives this holiday season,” NRF President and CEO Matthew Shay said.
“Retailers are fully prepared to meet the needs of holiday shoppers looking for that perfect mix of sales, quality and selection.”
Across the sectors
Gifts will comprise most of the expenditure, with survey respondents indicating they will spend on average $658.55 on presents.
A further $227.26 will be spent on non-gift holiday items such as candy and food, decorations, greeting cards and flowers; while other non-gift items that take advantage of the deals and promotions will add another $162.02 to the tally.
Across the ages
Customers aged between 35 and 44 will dig the deepest this year, spending on average $1,158.63 each, but younger shoppers will also drive the increased spending trend.
The survey notes, in addition to buying gifts for immediate family, younger shoppers will also extend their generosity to their circle of friends and co-workers.
More than half of shoppers between the ages of 25 and 34 (52 per cent) plan to purchase gifts for co-workers, and 82 per cent of those between 18 and 24 plan to purchase gifts for their friends.
The gifts they’ll buy
When it comes to exactly what shoppers are looking to buy as presents, gift cards top the list for the 13th year in a row.
The survey found:
- 59 percent of those surveyed indicated they would buy gift cards
- 52 will seek clothing and accessories as a present
- 35 per cent will purchase books/movies/music/video games
- 29 per cent will shop for electronics as a gift,
- 24 per cent will seek out home décor
- 23 per cent will buy jewelry
- 21 per cent will give personal care or beauty items
- 18 per cent will opt for gifts of sporting goods
- 17 per cent will purchase home improvement items
Where they will shop
This year the online realm ranks as the prime place people will start their shopping journey, with 56 per cent of survey respondents saying they will shop online.
Of those, 92 per cent plan to take advantage of free shipping, 48 per cent will use buy online, pick-up in-store (BOPIS) or ship to store services, and 16 per cent plan to use same-day delivery, which has doubled since 2015.
Many will also accompany those online purchases with shopping in-store.
- 53 per cent plan to visit a department store
- 51 per cent will go to discount stores
- 44 per cent will go to grocery stores
- 34 per cent will go to clothing and accessory stores
- 23 per cent will each go to electronics stores and local small businesses
The NRF also notes many shoppers will start purchasing well in advance of Christmas. Over a third (39 per cent) have already started buying before November, 43 per cent are waiting until at least November and 18 per cent are waiting until December.
What they’re looking for
Sales and discounts rank as the main factor many holiday shoppers are looking for.
Over two-thirds (70 per cent) of shoppers say sales and discounts are the main reason they will choose a retailer, 59 per cent will opt to shop in specific store due to its quality merchandise, 57 per cent will be looking for a range of merchandise, 46 per cent will pick a retailer based on free shipping and shipping promotions, and for 44 per cent convenient location will be a deciding factor.
A festive season ahead
The peak retail season officially kicks off this week courtesy of Black Friday and Cyber Monday sales.
The NRF has previously tipped this festive season will be a bumper period for retailers. They estimate holiday retail sales in November and December will be up by between 3.8 per cent and 4.2 per cent in 2018 for a total of between $727.9 billion and $730.7 billion.