Deloitte has released the findings of its “2022 Deloitte Holiday Retail Survey”. Amid a worsening economic outlook and concerns over travel disruption, Deloitte found travel demand is slowing in some cases, with less than one-third (31 percent) of Americans planning to travel between Thanksgiving and mid-January, down from 42 percent in 2021.
The study found that the intent to travel drops across income levels, but the higher income group is two times more likely to travel than the lower income group.
The latest “2022 Deloitte Holiday Retail Survey” examines what retailers can likely expect from consumers shopping for the holidays. With the current economic sentiment, Deloitte also explores holiday travel intent to present a complete spending picture this holiday season in the complementary report, “2022 Deloitte Holiday Travel Survey.” The continued impact of inflation and a shift in consumer priorities are set to define the 2022 holiday season, as consumers look for ways to make the season bright. While many Americans feel the pinch of higher prices, they may be evaluating how they spend money overall between socializing, gift-giving and travel.
For both studies, Deloitte surveyed 4,986 consumers online from September 6-14, 2022. From that group, 1,540 respondents who noted they would take a leisure trip this season and stay at paid lodging or with family or friends qualified as holiday travelers. For the holiday retail survey conducted September 1-13, Deloitte polled 40 retail executives across categories, of which 93 percent were from retailers with annual revenues of $1 billion or more.
The key findings of the study include:
- Inflation will likely curb holiday shopping habits: Holiday spending is flat year-over-year with an average $1,455 per household, but consumers plan to purchase fewer gifts (nine gifts versus 16 gifts in 2021) for family and friends.
- As consumers aim to keep the holidays festive, they will likely pull back on non-gift purchases (down 12 percent year-over-year), and shift spending to experiences (up 7 percent year-over-year).
- Low-income earners plan to spend 25 percent more than last year, while high-income earners plan to cut back seven percent.
- Travel demand slows, with less than one-third (31 percent) of Americans planning to travel between Thanksgiving and mid-January, down from 42 percent in 2021.
- Flexible work schedules continue to help laptop luggers takeoff: Those planning to do some work during their holiday travels are taking more trips and extending their trips by an average of eight days.
Holiday Travel Slows While Laptop Luggers Take Off
As Americans reevaluate their spending for this holiday season, more are planning to stay home, with both financial concerns and travel issues, including flight delays and cancelations, weighing on their decisions. Less than one-third (31 percent) plan to travel between Thanksgiving and mid-January, down from 42 percent a year ago. For those who will travel, reuniting and spending time with loved ones is the biggest motivation to travel in 2022.
The key takeaways:
This season will see 15 percent of Americans planning to travel on Thanksgiving weekend; 14 percent plan to travel between Christmas and New Year’s.
Financial considerations (selected by 37 percent of non-travelers as a reason not to travel) are this season’s most significant drag on travel demand, and one in five Americans staying home cite worries about travel disruption.
Of those planning to travel, three out of four plan to spend the same or less than they spent in 2021. This year’s average holiday travel budget (including transportation and lodging costs) will reach $1,287.
Thanksgiving will be the busiest time for travel, but the trips are short: eight out of 10 trips during Thanksgiving will be one week or shorter. While only 10 percent of holiday trips are planned for early January, nearly half of those will be longer than a week.
Nearly half of holiday travelers (46 percent) plan to take a flight, up from 37 percent last year. Given the drop in overall travel demand, the share of total Americans taking a flight (14 percent) will be similar to 2021 (15 percent). More than a quarter (29 percent) plan to fly domestically, and international travel is up seven percentage points from last year.
Among travel product categories, lodging demand will see the biggest dip, with 59 percent of holiday travelers planning to stay with friends or family. More than one-third (35 percent) will stay at a hotel (down from 37 percent in 2021), and 15 percent will book a private rental (down from 17 percent).
Older Americans, who were more enthusiastic for travel after the pandemic conditions improved, are once again staying home. Only 22 percent of Americans 55 and older plan to travel, down from 36 percent in 2021. Older Americans are more affected by concerns about delays and cancelations than younger Americans.
Laptop luggers’ zest for travel continues as more than a quarter of travelers (26 percent) intend to work on their longest trip of the holiday season. Those planning to do some work during their vacations take more trips (2.4 versus 1.6 for disconnectors).
Younger age groups, including 18-34 year olds (37 percent) and 35-54 year olds (27 percent), are more likely to work on their trips. However, laptop lugger behavior is more similar across income groups: 30 percent for middle-income travelers, 27 percent for lower-income travelers, and 23 percent among higher-income travelers.
Consumers Remain Festive
After pulling back last year, lower-income groups (those making less than $50,000 per year) plan to spend an average of $671 this holiday season, an increase of 25 percent year-over-year and similar to 2019 levels. Conversely, spending by higher-income earners (those making $100,000 or more per year) is expected to decline seven percent year-over-year to an average of $2,438 as they pull back on categories like electronics. Overall, consumers plan to maintain spending levels year-over-year by prioritizing shared experiences and cutting back on the number of gifts purchased.
The key takeaways:
- Inflation will likely impact consumers’ spending this holiday season, for both those planning to spend more and those planning to spend less. When asked about the reasons for the change in year-over-year spending plans, 51 percent of those spending more attributed it to higher costs (versus in 2021) as did 66 percent of those spending less, similar to 2021 (67 percent).
- Spending on experiences—which includes entertaining at home, and socializing away from home—is likely to increase seven percent year-over-year, to $575 per household. Spending on gifts is nearly the same year-over-year at $507 per household, though consumers plan to purchase fewer gifts.
- Retail executives are more optimistic: 77 percent expect holiday sales to increase year-over-year.
- With consumers planning to wrap fewer gifts, they will spend less time shopping (5.8 weeks versus 6.4 weeks in 2021), visit fewer websites and apps (9.1, compared to 11.1 in 2021), and visit fewer stores (5.9, down from 6.6 in 2021).
- Prompting shoppers to get a head-start on holiday deals, 60 percent of retailers surveyed say their companies will start holiday promotions at least one to two weeks earlier than last year.
- Amid higher prices and supply chain concerns, gift cards are becoming the go-to gift, prompting an average spend of $252 this year, up 7 percent from 2021.
- Gifting resale items continues to be a key cost-saving strategy as consumers look for ways to maximize spending: 32 percent of shoppers plan to buy resale items, and nearly half of surveyed retail executives (48 percent) will sell refurbished or used products this season.
Consumers Return to Stores
With pandemic anxieties waning, consumers continue to warm up to in-store shopping but are not ready to give up the convenience of shopping online. This preference for digital is also driving increased interest in social media and advanced technologies for holiday purchases.
The key takeaways:
- The share of in-store spending is expected to rise to 35 percent in 2022 (up from 33 percent in 2021), which is nearly on par with the 36 percent seen in 2019.
- Online continues to be a holiday shopping mainstay, holding steady with a 63 percent share. Further, the use of smartphones for online holiday shopping is rising, from 52 percent in 2019 to 56 percent in 2022.
- Consumers continue to value convenience for their holiday shopping, citing online (56 percent) and mass merchants (49 percent) as the most preferred retail formats. This year, grocery stores will likely see a boost in traffic (24 percent in 2022, compared to 19 percent in 2021).
- As digital-native generations gain purchasing power, social media continues to grow as a resource for shoppers. Over one-third (34 percent) plan to use social media for holiday shopping, and this is even higher for GenZ (60 percent) and millennials (56 percent). Further, 30 percent of holiday shoppers follow influencers for product recommendations, up from 24 percent in 2021.
- Future-minded consumers are exploring non-traditional platforms, with more shoppers (35 percent versus 25 percent in 2021) planning to use technologies including cashier-less stores, live/interactive video streaming, shoppable content and “buy now” buttons on social media.
Past Supply Chain Issues Push Shoppers to Start Early
While empty shelves and shipping delays were frequent last holiday season, retailers are more confident about inventory levels. However, amid inflation, brand loyalty may be harder to capture as lower prices and better availability will likely lure shoppers away from their standby brands and retailers.
The key takeaways:
- More than three-quarters of shoppers (77 percent) expect stockouts this season. However, retail executives are more optimistic. More than half (60 percent) are comfortable with the volume of holiday merchandise ordered, and all surveyed (100 percent) anticipate receiving their holiday inventory on time—versus 57 percent who reported the same in 2021.
- The holiday shopping season continues to pull forward, with 23 percent of holiday budgets spent by the end of October, compared to 18 percent in 2021. Early shoppers are doing so to help ensure timely delivery (42 percent) and avoid stockouts (41 percent).
- Though the season is moving up, nearly half (49 percent) of holiday shoppers plan to participate in Thanksgiving week events, up from 47 percent in 2021. Three in 10 holiday shoppers plan to spend on Black Friday (29 percent versus 25 percent in 2021), and Cyber Monday (30 percent versus 27 percent in 2021).
- More than half of consumers (60 percent) will trade brands if their preferred brand is not in stock, and they will check stock availability before making a shopping trip. Nearly two-thirds (65 percent) will trade brands if prices are too high.
For more information, visit www.deloitte.com.
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