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Inflation & Looming Recession Likely to Hit Holiday Spending

74 Percent of Holiday Shoppers Are Tightening Their Budgets Due to Inflation & Looming Recession

COVID-19 may be in control now, but its ill-effects might continue into the holiday shopping season is likely to be hit with a tsunami of looming recession and inflation. Shopkick survey has found that 53 percent of consumers are most concerned about being able to afford gifts for loved ones this holiday season. This survey was conducted during the first week of September 2022.

Let’s find out more about the effects of recession and inflation on the holiday spending trends.

As prices skyrocket and the cost of living increases, holiday shoppers are more price sensitive than ever before. According to recent data from Shopkick, a leading shopping rewards app, 85 percent of consumers say price and budget will influence them the most when building their holiday shopping list.

Shopkick surveyed over 14,400 American consumers between September 3 – September 6, 2022 to gain insight into how the current economy could impact consumers’ holiday shopping this year.

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Key Findings Include:

  • Inflation Impact: The majority of consumers (63 percent) say inflation and the looming recession have impacted the way they plan to shop for the coming holiday. To save money on holiday goodies, 49 percent plan to shop for deals and sales, 37 percent plan to limit the people they buy gifts for, and 36 percent plan to shop online more frequently to save on gas.

  • Slim Spending: Thirty-five percent of consumers plan to spend less on holiday shopping this year, as 65 percent feel less financially secure. Only 11 percent plan to spend more – 41 percent of whom are Gen Zers because they say they have more people to shop for (52 percent) and feel more financially secure (41 percent).

  • Jump Start to the Season: Forty percent of consumers will begin holiday shopping before Thanksgiving, a 15 percent increase compared to last year. Twenty-seven percent plan to get started before Halloween, an 18 percent increase from last year.

  • Shopping Seasons Greetings: Consumers say that sales and promotions will influence them most when it comes to beginning holiday shopping (77 percent), with a third of Gen Zers (32 percent) stating that in-store holiday decor will influence their holiday shopping timing the most.

  • The Death of Deal Days: Only 43 percent say they are planning to shop on Black Friday this year (an 18 percent decrease from last year) and twenty-seven percent plan to shop on Cyber Monday (a 40 percent decrease from last year). Younger generations are more likely than their older counterparts to take advantage of deal days, with 56 percent of Gen Z and 50 percent of Millennials planning to shop on Black Friday compared to 44 percent of Gen X and Baby Boomers, and 36 percent of the Silent Generation.

  • Online AND In-Store: The majority of shoppers will split their time online and in-store with 71 percent reporting they will utilize both, compared to 57 percent who planned to make the majority of their purchases online last year. Of the consumers shopping in-store, the majority (87 percent) plan to purchase holiday gifts at big box stores, followed by off-price retailers (52 percent), department stores (47 percent), and club stores (39 percent).

  • In-Store Priorities: When it comes to consumers’ in-store priorities, they care most about shopping at retailers that offer discounts and sales (55 percent). Other priorities include one-stop shops that offer holiday gifts and everyday items, shopping on less busy days at less busy times (each 40 percent), shopping with retailers who are close to home, and visiting fewer stores to avoid crowds and save on gas, even if it means sacrificing certain items or not visit preferred stores (32 percent).

  • Amazon Reigns Supreme: With 73 percent of consumers planning to shop at online-only retailers, 98 percent of consumers say Amazon will be their primary shopping destination.  Apart from Amazon, younger generations (43 percent Gen Z and 35 percent Millennials) plan to shop at Etsy and the Silent Generation will gravitate towards eBay (23 percent).

  • Shipping Savvy: Almost all consumers (91 percent) say free shipping is the most important incentive for online seasonal shopping. Other online shopping incentives include fast shipping (59 percent), flexible and extended return policies (42 percent), “buy now, pay later” (19 percent), and BOPIS (15 percent).

  • Sustainable Shoppers: In an effort to be more sustainable, 41 percent plan to shop at fewer stores to minimize gas emissions, 31 percent plan to bring their own shopping bags in-store, and 20 percent plan to reuse gift wrap from last year.

  • Holiday Excitement: Consumers are eager to enjoy quality time with loved ones this holiday season, as 73 percent say they are most excited to spend time with friends and family. They are also looking forward to spending time relaxing (48 percent), enjoying seasonal products and food (37 percent), and exchanging gifts (25 percent).

“As inflation continues to impact consumers’ budgets and fears around a potential recession linger, it is critical that brands provide value wherever possible because shoppers will be making trade-offs this year,” said Brittany Billings, EVP of marketing and strategic markets at Shopkick. “Offering deals and savings early – both in-store and online – should be a top priority, especially now that consumers are gearing up to tackle their holiday shopping earlier this year.”

Shopkick, a Trax company, is a leading shopping rewards app, bringing moments of joy to everyday shopping – both on- and off-line. For brands and retailers, Shopkick provides high consumer engagement along the entire path to purchase. The company’s unique pay for performance model has been proven to deliver high ROI, while driving incremental traffic, product engagement, and sales. Some of its leading brand and retail partners include Kraft-Heinz, Barilla, GE, Kellogg’s, TJ Maxx, and Unilever, among others.

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[To share your insights with us, please write to us at sghosh@martechseries.com]

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