PwC forecasts 7% increase in average holiday spend; Gen Z ‘rising star’ of season
Shoppers plan to spend an average of $1,638 on gifts, travel and entertainment this holiday season, marking a 7% increase from 2023 and a 15% jump from 2022.
That’s according to PwC’s annual Holiday Outlook, which noted that the numbers reflect both varied spending habits and the influence of inflation, which has driven up costs across the board.
The report found that that while millennials continue to drive overall spending, Gen Z is rapidly flexing its economic muscle, with their holiday budgets growing by 59% over the past two years. These shoppers are outpacing other groups, boasting an average spend of $1,752 (up 37% from last year), according to PwC.
In comparison, millennials cite a 22% increase. Gen X and baby boomers plan to reduce their budgets by 9% and 6%, respectively, compared to 2022.
"Gen Z’s 59% budget surge over two years demands strategic focus," the report stated. "CMOs have an opportunity to connect with these consumers by investing in mobile-first campaigns, shoppable social media content and AI-powered personalization. These tactics can drive engagement and conversions among this digitally native, high-spending cohort."
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There are also regional differences, with the South experiencing a 29% surge in projected spend since 2022. That compares to a 15% increase in the West, 12% in the Midwest and 0.4% in the Northeast).
In-Store Shopping
Physical stores continue to play a crucial role in holiday shopping, in part due to their experiential appeal. Nearly one-fifth of consumers rank holiday displays and store atmosphere (22%), holiday-specific products (21%) and making an event out of the shopping trip (17%) as the top three factors influencing their decision to visit physical stores during the holiday season.
While 60% of all consumers plan to visit the stores in person to make holiday purchases, the top purchasing channel varies by generation. When asked which channels they anticipate using when purchasing items, 66% of baby boomers opt for visiting the stores in-person. Gen Z and millennials are more likely to embrace mobile brand apps for purchases.
Other findings from the PwC report are below.
- In line with last year, debit cards remain the most popular payment method consumers plan to use when shopping this season (65% versus 66% in 2023), followed by cash and credit cards. Gen Z and millennials, meanwhile, are more frequent users of mobile payment methods, like Apple Pay and Venmo.
- Home delivery remains the top delivery method for 82% of consumers when shopping online for the holidays, consistent with last year. Preferences, however, vary significantly across generations and locations. While 89% of baby boomers plan to use home delivery, nearly half of Gen Z (49%) and millennials (48%) are opting for in-store pickup.
- Nearly two-thirds (64%) of Gen Z and millennials are likely to buy gifts that support a cause, compared to 55% overall.
- Seventy-two percent of Gen Z consumers say that it’s important to have self-checkout technology in-store when doing their holiday shopping. They also note the importance of mobile payments (70%) and brand apps (68%), turning brick-and-mortar into a high-tech playground.
- Male shoppers are set to outspend their female counterparts, with a projected 13% increase in holiday budgets. Fifty-eight percent of men plan to buy footwear as gifts for themselves, followed by electronics (55%) and video games (51%).
