Holiday Shopping Trends 2024: Inflation, Experiences, and the Consumer’s New Priorities

With the 2024 holiday season underway, inflation and the rising cost of living continue to impact consumer spending habits, even as optimism remains high. The latest industry data sheds light on three emerging trends all retailers should keep in mind this season: shoppers’ cautious spending plans, their focus on discounts, and the increasing shift toward experiential spending.

Inflation’s Strong Influence on Holiday Budgets, With Gen Z Feeling the Pinch

In a season typically marked by spending, Snipp’s 2024 Holiday Survey, which polled 299 U.S.-based consumers, shows that inflation and rising living costs are heavily influencing holiday budgets.

Ninety-seven percent of consumers report that the cost of living impacts their holiday shopping plans, with 65 percent saying it influences them “extremely” or “significantly.” Eighty-one percent of respondents plan to cut back on holiday shopping compared to last year, with 38 percent stating they will cut back “extremely.” Generationally, baby boomers (69 percent) are the least likely to scale down, while Gen Z (85 percent) leads in planned spending reductions.

The categories most likely to be impacted include electronics (53 percent), health and beauty (45 percent), and toys (44 percent), with smaller declines expected in home goods (35 percent) and groceries (36 percent). This suggests that consumers are prioritizing essentials and scaling back on higher-priced gift items this year.

This trend toward frugality has been consistent throughout the year. According to TD Bank’s 2024 Consumer Spending Index, 30 percent of respondents have been cutting back spending due to concerns about the economy and 42 percent have altered their financial priorities over the past year.

Deals and Discounts: The Key to Holiday Shopping

Amid rising prices, consumers are focused on finding the best deals. The Snipp survey found that 50 percent of shoppers rate discounts as the top influencer for their holiday purchasing. Additionally, 61 percent of consumers said they use coupons regularly, a third (33 percent) always use them, and 28 percent frequently do.

Gen Z and Gen X are the thriftiest, with 67 percent of these groups saying they always or frequently use coupons, compared to millennials (60 percent) and baby boomers (43 percent). According to data from eMarketer, 33 percent of U.S. grocery shoppers have upped their coupon usage this year compared to about a quarter (26 percent) in 2023.

When it comes to discounts, groceries top the list of items where coupons and promotions are most valued, with 56 percent ranking it as their No. 1 category, followed by packaged food (16 percent), apparel (8 percent), and electronics (7 percent).

Snipp also found that 76 percent search online for promotions, offers, loyalty programs and coupons, while in-store promotions (52 percent) and social media (48 percent) also play a role. Consumers’ top choice for how they receive promotions is email (44 percent), with fewer preferring text messages (21 percent), in-app notifications (14 percent), or social media (12 percent). eMarketer also reports that 35 percent of U.S. consumers access or download digital coupons when shopping in-store.

With competition for holiday shoppers' share of wallet heating up, retailers that can deliver personalized offers to consumers pre-, during and post-shopping are more likely to capitalize on the busy season. Providing Wi-Fi and incorporating QR codes on displays can also help retailers deliver value at the point of purchase.

Consumers Will Cook More at Home and Prioritize Experiences

Inflation is also pushing consumers to find creative ways to save on holiday meals, with many opting for budget-friendly alternatives. Key findings from the Snipp survey show that 45 percent plan to substitute ingredients with more affordable options, 43 percent will cook more at home rather than dine out, and 42 percent intend to shop at discount or budget grocery stores.

Deloitte’s 2024 holiday survey also identified a shift toward experiential spending, with a 16 percent increase in spending on experiences such as holiday events and gatherings. Deloitte’s data also indicates a focus on nongift purchases like party apparel and decorations (+9 percent), signaling that consumers are prioritizing social experiences as part of their holiday celebrations.

Grocery retailers that offer specials on holiday meal ingredients will reap the benefits of increased food traffic this season. Target is a great example of this, recently lowering the price of a Thanksgiving meal, saying shoppers can feed four for $20 ($5 less compared to last year). Retailers that provide money-saving recipes or create private-label merchandising strategies that emphasize savings on meals will benefit from increased sales from those looking to economize during the season.

Conclusion: Consumers Are Spending, But Carefully

As the holiday season unfolds, consumer behavior is shaped by a mix of cautious spending and a desire for value. While inflation is prompting many to cut back and seek out discounts, the importance of experiences is growing, with many shoppers focused on creating memorable celebrations rather than splurging on goods. Retailers and CPG brands catering to this demand for value and convenience, particularly through online channels and experiential product offerings, will be well-positioned for success in the 2024 holiday season.

Christopher Cubba is chief revenue officer of Snipp Interactive, a global marketing solutions company that brings together a modular PaaS technology suite with best-in-class marketing expertise.