In a new consumer report from Havas Media Group and Disqo, the CX intelligence platform, data provides contextualization of consumers and retail during this time of economic uncertainty and inflation.
Among the findings, researchers highlighted the increasing divide between the “haves” and the “have nots” this holiday season. The report, which surveyed more than 5,000 people, found that while most customers are attempting to trade down this holiday season, with a particular emphasis on grocery, dining out and travel, there is a stark bifurcation in spending intent between lower and higher-income consumers.
The authors of the report said that “while trading down and spending less are undoubtedly top-of-mind for today’s consumers, [the] data reinforces the complexity of decision-making during the holiday period. Even those with lesser economic means are willing to splurge on others (and themselves) during the holiday season and are willing to forgo immediate savings to cook up a premium feast, compensate the service industry and get to their holiday destinations more quickly.”
During the holidays, 40 percent of lower-income consumers told researchers they are cutting back on holiday activities while only 25 percent are increasing them. These findings were nearly reversed when looking at high-income families with 27 percent reporting planned cutbacks and 41 percent saying they would be increasing them.
On average, the companies found a 4-point decrease in intentions to engage in categories including nonessential home goods, personal electronics, air travel, dining out and apparel, which the authors of the report said suggests that overall spending intentions are below previous-year levels. New electronics and nonessential home items were two of the biggest categories where sacrifices would be made this year.
When looking at the intention for clothing purchases specifically, the data found that 33 percent of lower-income consumers would be trading down while 18 percent would be trading up. In comparison, 30 percent of higher-income consumers said they would be trading down with 26 percent saying they plan to trade up.
While budgets are tighter this holiday season, there was an overall sentiment to want to splurge on something nice for others and themselves. These intentions did vary by income level with higher-income respondents focusing on a big trip or entertainment event and lower-income consumers hoping to spend on personal gifts and nicer groceries. Additionally, 21 percent of consumers said they are more willing to trade up to premium products that they are gifting to others including clothing and home electronics.
As consumers do make decisions to trade up and spend more on the holiday season, the authors of the report said a “strong holiday season remains likely, but a 2023 economic hangover remains a distinct possibility for many low-income consumers.”