Consumer optimism signals a return to happier holidays
Consumers are ready to celebrate with more comfort and joy in their holiday shopping following the more reserved 2020 season hampered by the pandemic. This year, consumer optimism is high with many shoppers reporting they are back to work, have money in the bank, and are ready to spend on holiday purchases both instore and online, according to the findings of the KPMG Holiday 2021 Consumer Pulse survey.
Of the 1,000+ consumers surveyed, nearly half believe the economy is already back or will be back to pre-COVID-19 levels within one year. This is compared to 37 percent that felt that way a year ago. In addition, survey respondents reveal more favorable results toward their employment and income levels than last year.
For example, 83 percent of survey respondents with jobs that were the most impacted by COVID-19 report they are now back at work, compared to 65 percent in September 2020. More than half (55 percent) report their household income has returned to pre-COVID 19 levels. An additional 12 percent said their income has surpassed those levels.
“It’s so encouraging to know that people are back to work and have something to look forward to this holiday season. Last year was difficult at the height of the pandemic and the survey data from consumers shows that optimism has returned,” said Matt Kramer, National Sector Leader for Consumer and Retail at KPMG.
While consumer enthusiasm over the holiday shopping season abounds, survey respondents also acknowledge the potential impacts that supply chain disruption may have on their ability to get products in time. More than 50 percent of respondents are at least somewhat concerned about stockouts in stores and shipping delays. This will likely contribute to earlier shopping plans as 61 percent of respondents plan to start holiday shopping by October, up 10 percent from last year.
Higher spending anticipated
As household spending increasingly returns to pre-COVID levels, respondents are excited to spend more on the holidays. Consumers surveyed estimate a 5 percent increase in their holiday shopping budgets in comparison to last year. They plan to spend more on computers and hardware (47 percent), jewelry (41 percent), travel (38 percent), and games (32 percent).
On average, respondents plan to purchase more online across all categories during the 2021 holiday season. Some of the biggest increases in online gift purchases are expected in hardware (19 percent), and furniture (17 percent). Throughout the season, more consumers plan to shift to online spending for apparel, entertainment/media, personal care products, electronics and appliances, and groceries. More respondents plant to shift to instore spending over the coming months on furniture and sporting goods, hobby supplies, instruments, and books.
“The jump in holiday spending reflects an optimism that is encouraging,” said Scott Rankin, National Advisory Leader, Consumer & Retail at KPMG. “We also see a return to household spending which is no doubt behind some of the encouraging economic signs. Overall, consumers have a lot to celebrate this holiday season.”
Going out and planning ahead
Online shopping is expected to reach record numbers this year, but in-store shopping is also coming back in style. For example, 32 percent of consumers surveyed said they plan to definitely shop in-store on Black Friday, which returns as the most important event of the holiday shopping season. Notably, this is double the amount (16 percent) of respondents that planned to shop in-store on Black Friday last year.
Further showcasing a willingness to get out and celebrate the holidays, survey respondents plan to attend more holiday gatherings in person this year, particularly those involving family (24 percent increase since last year) and friends (14 percent increase since last year).