Trust is the shopping experience consumers crave this holiday

2020 US Holiday Outlook: October edition

Consumers are understandably restrained about holiday shopping this year in the wake of converging public-health and economic crises that will likely last the better part of 2020.

While 55% of consumers will spend the same or more as they did last year, a sizable proportion (40%) will spend less. More than half (55%) said COVID-19 tops their list of concerns about holiday shopping.

To find out more about shopping expectations and trends, we asked 1,000+ consumers nationwide about their intentions for what is shaping up to be a holiday season unlike any other in recent history.




Holiday shopping profiles vary 

A small minority of consumers (13%) will spend more this holiday, combining the best of physical and digital options. These under-35, high-earning city dwellers are not as worried about getting infected (42%) as those who will spend less (76%).

Meanwhile, 42% of consumers will spend the same as they did last year.

The more worried group who will spend less represents 40% of consumers from a wide variety of income levels. They skew older and hail primarily from rural and suburban enclaves.

Millennial shoppers (25-38 years old) will spend the most money this holiday, likely because many of them moved home to live with family at the start of the pandemic, while still being employed.


Implications

This holiday shopping season necessitates companies gaining more robust knowledge of pandemic-altered customer data to better respond to individual preferences.




Consumers to retailers: Please require masks

Health and safety matter most to consumers. By more than a 2-to-1 margin, public-health concerns topped consumers’ anxieties about in-store shopping.

However, they are willing to shop in stores if pandemic-related safety procedures are in place, with the overwhelming majority (88%) saying such procedures are important for in-store shopping.

Masks for workers and other shoppers top the list of desired safety measures, followed by capacity restrictions, the availability of hand sanitizer, regular store cleanings and temperature checks.

Millennials and boomers alike told us that COVID-19 safety protocols are essential when making holiday purchase decisions.

Implications

Stores should reassure consumers of their safety with the appropriate measures, as well as by communicating effectively via signage and ongoing digital updates, and forging partnerships with trusted sources



Point and click, then curbside pickup

Wary of the risks of in-store shopping, 61% of the consumers surveyed said they will do most of their holiday shopping online this holiday season. Laptop and desktop purchases dominate online shopping, reflecting the large portion of the workforce currently working remotely.

While home delivery remains the favored option for online orders, curbside pickup has soared in popularity, increasing 12% this year. The benefits are evident: Consumers get their items sooner, avoid shipping costs and minimize health risks by staying in their vehicles.

Retailers, meanwhile, can use stores — which are located closer to consumers than warehouses — for fulfillment. Most enthusiastic about curbside pickup are consumers 17 to 38 years old. In-store shoppers are most likely to be 55 and older.

Young shoppers (17-38 years old) will use curbside pickup at double the rate of shoppers 39 and older (49% v 26%).

Implications

Curbside pickup offers the ultimate in contactless shopping. Hold firm on digital investment to meet the accelerated demand for omnichannel options that skew heavily digital.




Pandemic-altered priorities

Consumers will visit fewer stores than usual this holiday season and will seek out those that offer contactless payment in an effort to minimize health risks.

Local or independent stores rank high on shoppers’ lists, as do loyalty programs and health and wellness offerings.

Younger shoppers are especially interested in the environmental, social and governance (ESG) practices associated with the products they buy. 

60% of consumers will visit fewer stores than usual this holiday.

Implications

Make your store worth the visit. Consumers are open to new brands that offer stability during this uncertain time. Local options provide a sense of community. Self-care brands serve up solace. ESG is a compelling differentiator




Entertain me, say young consumers

While overall spending is down this year, young consumers (38 and under) are primed to spend more on entertainment this holiday season, at almost double the rates of adults over 38 ($236 versus $121).

Young consumers have also led the increased use of smartphones, TV, digital streaming devices, game consoles and laptops over the past few months while sheltering in place. Latinx consumers are also prolific tech users. 

65% of consumers are in the market for a new tech device.

Implications

As digital natives, young consumers are voracious tech and media hounds. In contrast, older consumers are typically more loyal long term and have more disposable income. 




Have car, will travel

Older adults are understandably cautious this holiday; only 27% are planning to travel. After months of being home, however, 54% of consumers aged 17 to 38 are ready for holiday travel.

Overall, roughly the same percentage of consumers will travel this holiday as did last year — approximately one-third. However, the majority of them (69%) will drive.

PwC analysis has found that once consumers take their first post-pandemic trip, they are far more likely to travel again, having seen firsthand the safety protocols in place. 

16% of consumers would like to receive a gift of travel this year, compared to 9% last year.

Implications

Demand intelligence tools can help assess leading indicators of travel recovery to tailor specific messages to either confident or reluctant travelers. A one-size-fits-all approach won’t work.




Consumer confidence remains fragile

Fears of a spike in infections, uncertainty about the upcoming election and a congressional stalemate on fiscal relief are dampening enthusiasm for holiday shopping.

The fallout from COVID-19 ended the longest US economic expansion on record. While the collapse in economic activity seems to have bottomed out, recovery remains uneven.

In contrast, personal savings are at an all-time high. That when combined with job growth and an improved public-health outlook, could embolden shoppers to end months of restraint for a somewhat more jolly holiday.

Contact us

Tyson Cornell

Consumer Markets Industry Leader, PwC US

Allison Stone

Consumer Markets, PwC US

Krystin Weseman

Consumer Markets, Senior Analyst, PwC US

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