How Did Consumers Shop for Holiday Gifts?
We previously shared our thoughts on what are research predicted would happen in 2021, well here’s an update. Holiday market research reveals five strategic insights about consumer shopping behavior that will outlast the pandemic
Living through a pandemic has made people feel more sentimental, and holiday retail sales hit new highs in 2020 and 2021. Five strategic insights revealed through holiday market research explain consumer sentiment and shopping behavior:
- Spending: Polls and pulse surveys accurately predict consumer sentiment
- Timing: The holiday shopping season is getting longer, but traditions endure
- Discovery: People browse for gifts and seek ideas from many sources
- Conversion: Convenience and customer service matter more than gift prices
- Purchases: Consumers spend more online, and still enjoy shopping in stores
Spending: Polls and Pulse Surveys Accurately Predict Consumer Sentiment
Holiday spending has risen consistently for over two decades, increasing about 3.5% every year since 2000 according to a Gallup analysis, and pandemic-fatigued consumers spent even more on holiday gifts in 2020 and 2021.
Polls and pulse surveys are a reliable way to predict consumer intent during times of uncertainty. Gallup polls consistently indicated American consumers planned to spend more on holiday gifts in 2020 and 2021. And a survey by Deloitte indicated consumers that started holiday shopping earlier would spend 23% more than those who started shopping on or after Thanksgiving. The polls were right.
Holiday retail sales rose 14.1% in 2021, and 8.2% in 2020 according to the National Retail Federation. The NRF reports that strong wages, saving habits and pandemic-fatigue contributed to record levels of holiday spending during the pandemic — $777.3 billion in 2020 and $886.7 billion in 2021.
Timing: The Holiday Shopping Season is Getting Longer
Holiday traditions and shopping habits are deeply rooted, and most consumers wrapped up their holiday gift purchases in November or December in 2021 according to the National Retail Federation.
However, online shoppers tend to shop earlier, and most consumers began shopping for gifts before Thanksgiving in 2021 due to pandemic-related concerns about gift availability and delivery delays according to a survey by Jungle Scout:
- 31% start shopping before the end of Octobe
- 24% start shopping in November, before Thanksgiving
- 27% start shopping in November, after Thanksgiving
- 10% start shopping in December
- 7% start shopping in January
Discovery: People of All Ages Browse For Gifts Ideas Across Multiple Channels
Half of all holiday shoppers find it difficult to know what to buy for others, and are more likely to discover and buy a gift while browsing online or scrolling through social media according to a recent survey byAdweek. In fact, nearly eight in 10 consumers surveyed said they discovered a service or gift through a social media app on a mobile device.
According to consumer research by Jungle Scout, most people discover holiday decor and gift ideas in multiple ways:
- Search engines, particularly Google and Bing
- Ads on streaming services
- Ads on traditional TV
- Online retail sites
- Social media
- Browsing in stores
Conversion: More Consumers Care About Convenience Than Prices of Gifts
A recent study by Kantar found 47% of consumers base their purchasing decisions on price, and 66% of online shoppers say convenience matters more than price. Options to buy online and pick up curbside or in stores existed before the pandemic, and gained traction among people who want to save time or feel safer avoiding crowds.
According to consumer research rounded up by digital marketing expert Neil Patel, the top conversion points for holiday shoppers are:
- Gift availability
- Quick and easy checkout process
- Fast shipping, or the option to pick up at a store
- Free shipping
- Gift wrapping or personalized messages
- Buy now, pay later options
Purchases: Most Consumers Enjoy Shopping in Stores, but Spend More Online
According to the Deloitte holiday retail survey, consumers spent an average of $927 on holiday gifts in 2021, compared to $922 in 2021. While people enjoy in-store holiday shopping experiences, since 2018, consumers have spent more money buying gifts online than in stores. In 2021, the online share of retail holiday spending was 62%, compared to 33% in stores.
Heading into an inflationary environment, it will be important to continue monitoring consumer sentiment and spending plans to prepare for the holiday shopping season. While the average holiday budget has increased consistently among higher income households, a growing number of lower income consumers stopped exchanging gifts.
Consumer research can help businesses understand customers’ holiday shopping behavior and plans. Qualitative, quantitative and fast, quick-turn research solutions like pulse surveys deliver actionable and strategic consumer insights to innovate and optimize marketing strategies and the customer experience.
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