An astounding 88 percent of U.S. consumers plan to spend more or the same on holiday shopping this year, according to a consumer survey released by AlixPartners.
Notably, although small, at 12 percent those consumers who say they plan to spend less this season matches the number of consumers who say the Delta variant of COVID-19 will decrease their spending. Overall, the global consulting firm is projecting an increase of 10 to 13 percent over last year’s holiday season in the U.S. This increase would make 2021 the strongest holiday period since 1999.
“Our message to retailers is: ‘This holiday season is yours to lose,’ said Joel Bines, global coleader of the retail practice at AlixPartners and a managing director at the firm. “There’s unprecedented pent-up demand out there, consumers have lots of money in their pockets, in part due to recent government programs, and even the rise of the Delta variant, while certainly concerning, doesn’t seem poised to put a damper on things, thanks in part to the big increases in online shopping this past year.”
Moreover, Bines said, this doesn’t mean that retailers won’t face some big challenges this season. Among these challenges will be ongoing supply-chain disruptions, increased logistics and delivery costs, current high inflation rates and dealing with increased labor costs.
“If not handled correctly, any one of those things could quickly derail things for retailers this season,” Bines said.
Further, as retailers prepare for the holiday season ahead, Alexa Driansky, senior vice president in the retail practice at AlixPartners and a contributor to the firm’s forecast and survey, added that they need to be aware that while consumers will show up to shop this holiday, the power has shifted from retailers to consumers.
“With a quick internet search, consumers will switch to whichever retailer has the product in stock, find a good price and get either delivery or pick-up fast and for free,” Driansky said. “Retailers will need to be more agile and resourceful than ever to make sure it’s them and not their competition that comes out as the winners this season.”
AlixPartners’ survey also found that just over half of consumers plan to start holiday shopping before Halloween, representing an increase of 4 percent compared to last year’s survey. And at the same time, 43 percent of consumers reported they plan to do a majority of holiday shopping online.
Still, 57 percent of consumers said they plan to go to physical stores. According to the company, the 7 percent increase from last year’s survey may represent another indication of the power of current pent-up demand.
“One big thing retailers should focus on right now is ensuring they truly have robust omnichannel-fulfillment capabilities,” said David Bassuk, global coleader of the retail practice and managing director at AlixPartners. “That means things like things like optimizing inventory across stores and distribution centers, using stores for online fulfillment as mini-distribution centers, and fully leveraging concepts like BOPIS [buy online, pick up in store] and curbside pickup. And, of course, all those things need to be underpinned by integrated — and well-informed — analytics.”
AlixPartners’ 2021 U.S. retail holiday outlook surveyed more than 1,000 consumers over the age of 18 from Sept. 3 to 10.