2024 Holiday Shopping: Consumers Face Internal Conflict Between Spending and Saving

Planning for the end-of-year holiday shopping season is already well under way for many retailers. As strategies are hammered out, it’s critical to understand what consumers are looking for and where their preferences lie this year.

While inflation has slowed, it hasn’t stopped impacting wallets. Vericast recently conducted consumer research to uncover how people are approaching their holiday shopping this year. The 2024 Holiday Retail TrendWatch report shows the latest evolving trends and how consumers are planning out their holiday purchases. Interestingly, a battle between saving and spending is what’s driving motivation around holiday shopping.

Consumers Are in Turmoil Over Spending vs. Saving

Vericast’s latest research indicates consumers are facing an internal conflict between the desire to save money and the temptation to splurge during this year’s winter holiday season. Well over a third (41 percent) intend to splurge on gifts for themselves, even when tightening spending elsewhere. On the flip side, almost half (46 percent) of consumers say they need to spend less on holiday gifts this year.

This even goes beyond gift buying. One in three consumers plan to host at least one holiday party, and the feelings around budget are mixed: 56 percent plan to spend more to make the event special, but at the same time, 66 percent will be looking for ways to save as much money as possible on things like food and party supplies.

What Retailers Can Do

The bottom line is consumers will always spend around the holidays, but in today’s economic environment they're putting more thought into what and how they will spend. Retailers need to understand this to reach shoppers where they are. Here are some tips to consider:

Capitalize on special shopping days.

Almost one-third of consumers plan shopping days specifically dedicated to buying holiday gifts. Couple this with annual shopping days like Black Friday and retailers have an opportunity to truly capture shoppers in the moment they're looking to buy.

Convenience, plus the chance for unique deals and discounts, are a large part of what motivates consumers to shop on Thanksgiving or Black Friday, for example. In fact, 51 percent say they have plans to shop both in-store and online during Black Friday, giving retailers a clear opportunity to directly engage consumers across channels and mediums.

Be the cure for consumer FOMO.

Consumers are looking for a sure thing, with 44 percent saying they will purchase an item immediately when they find it for fear it won’t be available later in the holiday season. Retailers can quell the FOMO frenzy among consumers with limited time offers and early season promotions. This can help get consumers buying sooner as 44 percent plan to start shopping for the holidays in October or earlier.

Offer deals and reward loyalty continuously.

Sales and discounts make the holiday season a great time of year to make purchases, according to 56 percent of respondents. Furthermore, 38 percent say they're most interested in receiving deals and discounts that will  make holiday shopping more affordable. More than half of consumers (57 percent) are more likely to shop when their loyalty is rewarded with personalized offers or coupons and discounts.

Consumers are becoming more savvy in how they search for the best deals. Leveraging promotional emails, social media campaigns, special sales events (e.g., Prime Day), in-app promo codes, and in-store deal days are all effective methods for capturing shopper attention.

Boost Holiday Sales and Engagement

Crafting an effective retail marketing strategy that resonates will drive success this coming holiday season. That’s not a new concept, but what people want is always changing, so staying agile and tailoring those strategies to fit will be what wins consumers' hearts and wallets.

Chip West is the retail and consumer behavior expert at Vericast, a marketing technology company that provides a data-rich approach to influence consumers and drive meaningful commerce.