Retail and Consumer 2016 Holiday Outlook: Key Findings

1. Bigger holiday budgets   

Consumers are primed to spend more

2. Chill for the holidays

The emerging influence of hipsters

3. Shopping is social for Gen Z

90% relate to influencers on a personal level

4. Millennial parents think of others first

Have smartphone, will shop

5. Holiday time . . . and the buying is easy

Frictionless checkout #1 priority

6. Thumbs a tapping in a mobile wonderland

Digital, mobile shopping up almost 25% each

7. I want it . . . now

A range of last mile options

8. There’s always a deal . . . somewhere

Retailers offer more deals more often

9. Brands matter

Local, independent brands matter more than ever

10. Season of caring

Consumers and retailers alike illustrate humanity in action

1. Bigger holiday budgets

Consumers are primed to spend more

Shoppers told us they plan to spend 10% more this holiday season; an average of $1,121 each. And consumers with annual household incomes less than $50,000 will increase their percentage spending levels even more than consumers overall.

2. Chill for the holidays

The emerging influence of hipsters

Hipsters—upwardly mobile, college-educated millennials in enclaves such as Austin, Brooklyn, Oakland, and Portland—will spend $500 more this season than consumers overall. And they will spend a hefty third of their holiday budget on themselves.

3. Shopping is social for Gen Z

90% relate to influencers on a personal level

At 86 million strong, Gen Z’s influence is indisputable in the proliferation of interactive digital content, especially mobile video. These social media whiz kids are tactile; they like stuff. And shopping in stores with friends and family. Reviews from actual product users appeal to them; ads don’t.

4. Millennial parents think of others first

Have smartphone, will shop

Millennial parents—often juggling full-time jobs while caring for young children—are almost twice as likely as other consumers to use a mobile device to pay for purchases. Far more optimistic about the economy, they start shopping earlier than consumers overall—and enjoy it more (75% versus 61%).

5. Holiday time . . . and the buying is easy

Frictionless checkout #1 priority

Used to frictionless checkout online, customers want a similar fast and easy checkout experience in-store. They also want Wi-Fi access to check product availability and prices. And knowledgeable sales associates to help find products and explain features.

6. Thumbs a-tapping in a mobile wonderland

Both digital and mobile shopping are up almost 25% each from last year

Anticipating an almost 25% increase in annual digital sales, retailers are boosting their investment in digital channels. Meanwhile, mobile shopping also is up almost 25% over last year. From scouting products and monitoring deals to paying for products and tracking packages, shoppers are going mobile.

7. I want it . . . now

A range of last mile options

Some 60% of retailers will provide both free shipping and free returns this holiday season—a must-have for consumers. Retailers are offering a variety of online and in-store ordering and delivery (or pick-up) options to provide the optimum mix of convenience, price, speed, and variety.

8. There’s always a deal . . . somewhere

Cultural, social, retailer-generated holidays mean more deals more often

As global borders shrink and the world’s population becomes more mobile, consumers shop year-round, lured by a flurry of deals and discounts. In fact, 64% of consumers will begin holiday shopping before the start of Black Friday week. And 29% will have completed most of it by then.

9. Brands matter

Local, independent brands matter more than ever

Brands matter to 80% of our survey respondents—whether established household names, local businesses, independent retailers, or new entrants. Almost 75% of consumers plan to shop locally while 56% will seek independent retailers.

10. Season of caring

Consumers and retailers alike illustrate humanity in action

Shoppers will give an average of $244 to their favorite causes: health and social services, community development, animal welfare, disaster relief. And 75% of retailers will make charitable contributions. Consumers told us they favor retailers who are committed to corporate responsibility.

Spotlights

Pet owners—almost half of all households nationwide—will buy the likes of everlasting treat balls and cat dancers for their favorite animal companions. They will spend an average of $62 this year on Fido or Tiger or both. Of our most generous animal lovers, millennials will outspend everyone else at $81 each, followed closely by Gen X at $79, families with children at $71, and singles at $70.

Some 33% of consumers told us they will buy handmade gifts this holiday season. In fact, almost 75% of shoppers will turn to local retailers. From hipsters to higher-income households to socially and environmentally conscious consumers, niche retailers are stepping in to respond to the call for new and different holiday gifts. Some are on their way to becoming powerhouse brands in their own right.

While cars may not show up on the shopping lists of most consumers, December consistently charts automaker rebates and spikes in auto purchases. They typically offer rebates in December, particularly for luxury vehicles. Another anticipated driver of high demand could be record-low interest rates. In an environment of record-high auto prices, low-interest auto loans could be a motivating factor.

Contact us

Steven J. Barr
US Retail and Consumer Leader
Tel: +1 (415) 498 5190
Email

Allison Stone
US Retail and Consumer
Tel: +1 (646) 471 8766
Email

Krystin Weseman
Senior Analyst, US Retail and Consumer
Tel: +1 (312) 298 4238
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