According to Discover’s annual Holiday Shopping survey, the number of consumers who plan to curb spending almost doubled in one year, from 18% in 2019 to 35% in 2020, yet that doesn’t necessarily mean slashed gift budgets.
As they change holiday planning, consumers are changing where they are shopping, with 74% of respondents saying they would tap online retailers more, and 61% saying they would participate in more online shopping holidays such as Cyber Monday. The survey identified GenXers and Millennials as the most likely to cut back their spending this year, 42% and 36%, respectively.
Financial concerns and disrupted social engagements are the top reasons consumers report amending their budgets. The main reason to act for those who plan to spend less: 37% cite financial instability caused by COVID-19; 32% cite spending less on food and decorations as they foresee fewer holiday celebrations; 28% cite no longer needing to travel like they have in years past.
Of those who plan to do most of their holiday shopping online, 49% said they are doing so to better protect their health during COVID-19 and 38% expressed discomfort shopping around in-store crowds. Even when shopping in stores, consumers favor contactless technology, as 68% of respondents said they would use contactless payments more to avoid touching public surfaces, and 66% said they would use less cash as a result of the pandemic. Consumers across all generations are using contactless payments when holiday shopping: 78% of Millennials said they would use contactless payments more frequently this year followed by Gen Zers, at 75%, Gen Xers, at 70%, and Boomers at 60%.
A majority of younger consumers plan to support small businesses, with 77% of Gen Z and 70% of Millennial survey respondents saying they would shop more frequently at small businesses this year versus 61% of Gen Xers and 49% of Baby Boomers. Younger consumers intend to get a head start on their holiday shopping, too, with 77% of Gen Zers and 71% of Millennials reporting they would start shopping earlier this year as compared to 60% of Gen Xers and 42% of Boomers.