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Deloitte: Holiday spending heading back to normal

Deloitte holiday spend 2023
Deloitte predicts holiday shoppers will spend over $1,400 each.
Deloitte holiday spend 2023
Deloitte predicts holiday shoppers will spend over $1,400 each.

A new survey indicates consumer enthusiasm for the upcoming holiday season is at levels not seen since 2019.

According to the annual “2023 Deloitte Holiday Survey,” consumer spending is expected to surpass pre-COVID pandemic levels for the first time. Consumers surveyed plan to spend an average of $1,652, representing a 14% year-over-year increase.

Meanwhile, Deloitte’s recent annual holiday retail forecast expects retail sales will increase 3.5% to 4.6% to total $1.54 to $1.56 trillion during the November to January timeframe in 2023. 

Nearly all holiday survey respondents plan to participate in the holiday season (95%, up from 92% in 2022 and 88% in 2021), also reflecting a return to pre-pandemic levels.

More than seven in 10 (72%) consumers surveyed expect higher prices and plan to navigate inflation by budgeting for fewer gifts (eight compared to nine in 2022), spending more on gift cards ($300 compared to $217 in 2022), and seeking out deals (66% plan to shop Black Friday — Cyber Monday (BFCM) compared to 49% in 2022).

Nearly 30% of respondents will be responsible for almost 70% of the holiday spending this year, spending an expected average of $2,146 or more for the season. Deloitte analysis shows these higher spenders are focused on quality products, while other shoppers focus on getting a deal.

Holiday shoppers head for physical shops

The survey also indicates that consumers plan to shop in-store as they search for deals and avoid shipping costs this holiday season. Preference for in-store purchases is returning to 2019 levels: 37% of the average respondent budget will be spent in-store (compared to 36% in 2019). During 2023, only 28% of respondents plan to leverage Buy Online Pay in Store (BOPIS) to acquire gifts, down from 35% in 2022.

Respondents cite the top reasons for spending more in-store as the ability to interact with the product (44%), to ensure product quality (39%), and to avoid shipping costs (28%). Online-only retailers (63%) and mass merchants (53%) as the most preferred retail formats.

Other findings

  • Eight in 10 respondents who shop online are willing to meet a minimum purchase to earn free shipping and are willing to spend $40 on average.
  • Eight in 10 respondents (79%) have little to no trust in retailers' ability to use AI responsibly in their operations — only one in five plan to use generative AI for holiday shopping, primarily to look for deals.
  • Two-thirds (66%) of respondents plan to shop during Thanksgiving week, up from 49% in 2022.

"After several years of uncertainty, shoppers return to the familiar to make their holiday celebrations shine.,” said Brian McCarthy, principal, Deloitte Consulting LLP. “They plan to frequent their favorite retailers and focus their shopping during the traditional late fall period. With customers planning to shop fewer weeks, retailers have a shorter amount of time to gain consumers' attention, highlighting the importance of the November promotional events this holiday season."

Results are based on a survey of 4,330 consumers fielded between Aug. 30 and Sept. 8, 2023. Deloitte also surveyed 43 retail industry executives, of which 93% were from retailers with annual revenues of $1 billion or more, June 23-30, 2023.

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