Consumer spending habits are being reshaped by global economic challenges and sustainable shopping options. These shifts are driving retailers to reinvent their traditional strategies to meet customers’ evolving preferences for gifts and décor.
In October 2024, Blue Yonder asked more than 4,000 consumers across the world to share their perspectives on traditional holiday purchases like gifts and décor. The findings explore how consumer spending habits and behaviours are shifting under the pressure of inflation across different regions and generations.
Shoppers prepare to spend big, with Gen Z leading the charge
While inflation is still a significant concern for most consumers, it likely is influencing spending habits as 44% of overall respondents plan to spend slightly or significantly more this holiday season compared to 2023. Leading this trend is Gen Z, with 62% planning to spend more, followed by 57% of Millennials, 35% of Gen X, and 26% of Baby Boomers.
Consumers prefer e-commerce platforms and superstores
Across generations and regions, a significant number of consumers are not only assessing their budgets, but also their preferred shopping locations.
The popularity of online shopping — driven by fast shipping, online-only items and convenience — will see 60% of overall respondents choose e-commerce platforms for gift shopping. Millennials (64%) are the most likely to shop on e-commerce sites, followed by Baby Boomers (62%), Gen X (60%) and Gen Z (51%).
Superstores are a close second for shopping options, with 56% of overall respondents planning to take advantage of the one-stop-shop experience to purchase everything from toys to groceries. The option is most popular within the US, with 75% of American consumers planning to visit a superstore.
Other popular shopping options for overall respondents include department stores and brand retailers (38%) and discount stores (34%).
Shipping costs remain the top concern
As consumers fill their online shopping carts, they’ll be keeping a close eye on the shipping price and timeline. Nearly half (48%) of overall respondents cited paying for shipping as their top shopping concern, and 42% are worried about uncertain delivery times and shipping delays.
But consumers are also worried about being able to purchase gifts in the first place. Nearly half of respondents in all regions cited limited product availability (43%) and crowded stores (42%) among their concerns.
A significant portion of overall respondents (41%) are also concerned about missing sales and paying full price for their items. Gen Z is the most (44%) concerned with missing sales and paying full price for items, closely followed by Millennials (43%), Gen X (39%) and Baby Boomers (37%). This sentiment isn’t unique to one region — 44% of US, 43% of German and 38% of UK and French consumers all share this concern.
Consumers prioritise sustainable options
Product quality and overall sustainability are key focuses for consumers, with almost half (48%) of all respondents planning to shop sustainably by purchasing décor that can be reused for several years.
Many Gen Z (41%) and Millennial (36%) consumers will limit their use of decorations that consume more energy or produce waste in an effort to promote a more sustainable lifestyle as compared to Gen X (29%) and Baby Boomers (25%).
What does this mean?
Consumers and retailers alike are adapting to global challenges and trends. To meet consumer expectations, both online and in-store, retailers should look to adapt their strategies, including incorporating the latest technology to provide a seamless shopping experience – removing some of the stressors for their customers.
Economic pressures continue to influence consumer spending habits. However, with many of today’s cost-conscious shoppers loosening their purse strings during the holiday season, this presents a unique opportunity for retailers to align with shifting consumer preferences. Whether it’s tapping into consumers’ growing demand for sustainability, or appealing to the top-spending Gen Z’s, retailers that address these trends head-on are likely to see success.
With shoppers most concerned about uncertain delivery times, delays, and limited product availability, order fulfilment should be top of mind for retailers looking to generate maximum profit. Real-time inventory visibility that enables retailers to see exactly what inventory is available, and where, is essential to optimise fulfilment, reduce stockouts and meet customer expectations.
Retailers can also reduce order delays by optimising their picking, packing and shipping operations to deal with demand. By understanding shoppers’ expectations and leveraging the right technology to ensure these are fulfilled, retailers can boost shopper conversion rates and sales.
Wayne Snyder is vice president of retail industry strategy for EMEA at Blue Yonder.