Nearly half of consumers surveyed will spend less if inflation continues to drive price increases.
Uncertainty around inflation, gas prices and supply chain is driving consumers’ holiday plans.
Holiday 2022 shopping budgets are up 8% over 2021 and holiday travel budgets are up by almost half, but inflation and price increases have made economic concerns top of mind this holiday season, according to the annual global holiday shopping and travel report by IBM's Institute for Business Value.
While 59% of consumers surveyed say they will be less concerned about COVID-19, two in three say they will be more concerned about the economy. Also, 59% reported worrying more about supply chain disruptions that could make holiday shopping harder or more expensive.
Nearly half of consumers surveyed will spend less if inflation continues to drive price increases. If consumers do cut their holiday shopping budget, over 60% will cut non-essential categories such as apparel, footwear, jewelry and accessories, the
If goods are not available due to supply chain issues, 41% of respondents say they will spend less. But 30% will spend more if they can find substitutions easily.
Nearly seven in ten respondents say they will opt for brands or retailers that offer free cancellations, order changes, and returns, as well as a COVID-19-safe environment this holiday season. The study findings seem to indicate these perks are often worth the price due to the continued worries around supply chain and product availability this season, the report advised.
The survey also revealed that sustainability remains top-of-mind for majority of respondents, with 73% of respondents considering sustainability when shopping for the holidays.
Twenty-nine percent of consumers surveyed will bundle multiple orders to help reduce carbon emissions, while 38% will avoid single-use plastics, and 42% will choose to shop nearby. Forty-one percent will buy products that are branded as being environmentally sustainable or socially responsible (41%).
Notably, respondents surveyed are willing to pay an average premium of 41% for sustainable products, 34% for sustainable air travel, and 37% for sustainable lodging this holiday season.
"As more consumers align their purchases with their values, retailers and brands that can provide more environmentally-friendly options could potentially earn a greater share of holiday spend," said Karl Haller, partner, Consumer Center of Competency Leader, IBM Consulting.
Other noteworthy findings include:
• If gas prices go down, 35% of consumers surveyed will do more in-store shopping.
• Continuing the shift away from the traditional Black Friday start of the shopping season, 58% of consumers surveyed plan to start holiday shopping before November, compared to 44% last year. Almost two in three plan to pre-order this holiday season to get their products on-time with guaranteed prices.
• The average travel demand will go up by 9% during the holiday season and 78% of consumers surveyed are planning to purchase their airfare before October (61%) or in October (17%).
"According to the survey results, in 2022, consumers are hoping to re-embrace holiday traditions they've had to alter for the past two years," said Haller. "They're starting their shopping and travel planning earlier but also want to hedge their bets with options like free returns or cancellations. To adapt to these changes in consumer behavior, retailers will need better visibility and traceability across product inventory, fulfillment, and returns. AI can help them understand, prioritize, and resolve critical issues in real time."
To better understand consumer perspectives, as well as their plans to shop and travel this holiday season, the IBM Institute for Business Value (IBV) surveyed more than 12,000 adults across nine countries (Brazil, Canada, France, Germany, India, Mexico, Spain, United Kingdom, United States) in August 2022.