Dive Brief:
- As supply chain bottlenecks continue to haunt retailers, three-fourths of consumers are worried about products running out of stock, prompting them to make their holiday purchases earlier this year, according to a new Deloitte report. Six in 10 retail executives are also worried about receiving holiday orders on time.
- The Deloitte report predicts that holiday spending will increase by 5% from last year to $1,463 per household on average. While higher-income households plan to spend an average of $2,624 per household, lower-income households expect to spend less than last year, at $536.
- According to the report, 40% of shoppers remain anxious about shopping in stores, down from 51% in 2020. Even with more comfortability shopping in stores, consumers expect to spend $924 online, an increase from $892 last year.
Dive Insight:
Deloitte's projections indicate that consumers are slightly more optimistic than last year, which is a sign that this year could be better for retailers. In 2020, as the coronavirus pandemic complicated in-store shopping, Deloitte predicted retail holiday sales growth would reach around 1% to 1.5%, but e-commerce sales were expected to jump between 25% and 30%.
This year it's uncertain how much in-store and e-commerce shopping will increase, as some shoppers will likely feel comfortable returning to stores while others stay away. A September Deloitte report indicated that holiday sales could rise between 7% and 9%, reaching a total of up to $1.3 trillion. Meanwhile, e-commerce sales could see an uptick between 11% and 15%, amounting to a $218 billion increase. However, the NPD Group anticipates that holiday spending overall will increase by 3% in November and December.
Some reports have also indicated that consumers are ready to start shopping in stores again. The NPD Group's report found that 58% of consumers plan to shop in physical stores thanks to the prevalence of COVID-19 vaccines.
Projections for how much consumers will spend also vary. Though Deloitte predicts that households will spend nearly $1,500 this year on average, JLL found in its report that respondents plan to spend $870 per person, with Amazon, Walmart, and Target being the top three retailers where consumers plan to shop.
What Deloitte as well as other research makes clear is that consumers are ready to shop earlier this year, in part because they want to get their goods before they go out of stock. Similar to Deloitte's most recent research, reports from the NPD Group and JLL both indicate that a sizable share of consumers plan to shop before Thanksgiving.
As consumers seek out holiday gifts early, retailers such as Target, Amazon and Best Buy have begun offering their holiday sales well before Thanksgiving to accomodate them. Retailers are still feeling the impacts of supply chain disruptions, which are expected to bring product shortages this season.
via https://www.aiupnow.com
Tatiana Walk-Morris, Khareem Sudlow
