Consumers Are Poised to Share Holiday Cheer With Retailers Who Earn Trust
After spending last year’s holiday season overwhelmed by the pandemic, PwC’s 2021 holiday consumer survey finds consumers are feeling freedom associated with the vaccine and are ready to participate in holiday-related activities.
Notably, the company found only 20 percent of consumers saying the pandemic could “significantly dampen holiday spending.” In fact, nearly 40 percent of respondents reported the pandemic would not affect their ability to spend this holiday season and 30 percent of consumers said they will likely spend more than they did last year.
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On average, the report shows, consumers will spend $1,447 on gifts, travel and entertainment — an increase of more than 20 percent compared to the 2020 holiday season and an increase of 13 percent from 2019.
Further, the survey indicates after feeling deprived during the 2020 holiday season, consumers also plan to treat themselves this year with consumers saying they will spend $442 on themselves on average this holiday season, a 48 percent increase year-over-year.
Millennials, PwC’s report revealed, have the highest average budget for the holiday season at $1,646, compared to an average budget of $1,447 across all consumers. Additionally, 20 percent of Millennials said the pandemic had actually had a positive impact on their holiday budgets citing a boost in savings during uncertainty last year.
In contrast, 26 percent of Gen Z consumers said the pandemic will significantly impact their ability to spend this holiday. To win overall consumers, PwC notes it will be important for retailers to understand differentiate preferences associated with budgets. For example, the report finds that price-sensitive shoppers are increasingly using a range of buy now, pay later options.
Meanwhile, as they shop, Millennial consumers were found to favor in-store pick up more than consumers within other age groups. PwC advised companies to carve out space in physical stores to accommodate this expectation, noting consumers’ willingness to try new methods of convenient pick-up and repeat visits after exceptional customer experiences.
Millennial consumers also said they are eager to shop environmentally and socially responsible brands this holiday season and are looking to social media for information about a brand’s environmental, social and governance practices.
Trust will continue to be a large factor in winning consumers over this holiday season, according to PwC, with the number-one drivers of purchasing decisions, revealed as brand trust, local producers and stores and environmentally and socially responsible brands.
Overall, 76 percent of consumers said they will favor companies with a strong ESG commitment. Diversity and inclusion in particular is on the minds of holiday shoppers with 80 percent of survey respondents citing these values. Moreover, 76 percent of consumers said they would discontinue a relationship with a company that they learn treats the environment, employees or the community in which they operate poorly.
An overwhelming 92 percent of consumers said trust is top of mind during holiday shopping — compared to a 70 percent response that PwC has seen in its surveys from previous years. The authors of the report said this is likely due to a change in the environment that has experienced an increase in concern for public-health issues, cybersecurity and privacy issues when shopping online. To that end, 85 percent of shoppers said they will shop from local stores and independent retailers with higher priority.
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