Budgets are top of mind for holiday shoppers this year, no matter what buyer persona the consumer falls into.
According to a new survey from Klaviyo, which looked at 3,500 consumers across the U.S. and Canada, despite economic worries, 65 percent of shoppers plan to spend either the same amount or more on 2022 holiday gifts compared to last year with 99 percent reporting they are aware that inflation is affecting the cost of goods and services.
Moreover, the survey revealed only 2 percent of shoppers said they will not have a “strong impact” on holiday spending plans.
For 67 percent of consumers, inflation is directly impacting purchase decisions already, looking at how they spend on utilities, transportation and groceries. To offset these costs, consumers said they are spending less on discretionary purchases including home entertainment (28 percent), apparel and accessories (28 percent), jewelry and watches (27 percent) and home decor (27 percent).
Still, with new spending trends in place, Klaviyo’s report predicts hope is far from lost for retailers, as consumers still plan to “spend a lot” over the holidays.
To enable continued spend around the holidays, consumers said they are “looking for creative ways to stretch a dollar” at checkout. With this in mind, the authors of the report said “online retailers willing to align with that cause by offering holiday discounts, bundled product packages and free gifts will be more likely to earn consumers’ trust and loyalty — and their business.”
While the report found that cost will be of high importance to all demographics this holiday, there were a few key differentiators between the generations. Younger generations, for example, are more likely to increase gift spend this year.
With this in mind, Jen Brennan, director of digital marketing at Northern Commerce, said in the report that when it comes to Millennials, they “are one of the most valuable audiences available to brands” and that “understanding their needs and what drives their purchase decisions is a critical component to Cyber Week success.”
Klaviyo’s survey found that most Millennials (40 percent) will take a hybrid approach to holiday shopping this year, splitting time between online and in-person shopping. Additionally, Millennial respondents said they will be putting more spend toward essentials like health products (58 percent) and food, beverage and groceries (49 percent), but also discretionary purchase in categories including fitness (54 percent), jewelry (43 percent) and electronics (38 percent).
Similarly, Gen Z respondents said they plan to shop evenly online and in-store this holiday season with a large portion of their budgets going to health products. However, this generation’s view of inflation was revealed to be more similar to Baby Boomers than Millennials, with inflation already impacting spending decisions.
Other key shopper identities that stood out in the report included parents, who are likely to be big spenders this holiday.