Prosper Insights & Analytics has released its “Holiday 2016: Top Trends,” which includes somewhat restrained consumer spending plans but a more flexible outlook on purchasing.
According to Prosper, anxiety and frustration associated with the presidential election seem to have affected consumers’ holiday spending outlook. Prosper determined that planned spending per person would hover around $796 as compared to $819 last year. However, by early November, several of Prosper’s broader financial trackers indicated that consumers have become less conservative with their spending plans, suggesting that, despite political uncertainty, shoppers may ramp up their spending. Up 4.4%, self-spending continues to impact purchase intentions and brings the total planned spending per person to $936, off marginally from 2015’s $953.
The elections aren’t the only thing affecting holiday spending plans, Prosper maintained. A lack of must-have products this season and an undercurrent of people having enough “stuff” also contributes to spending intentions.
Millennials are the hot segment on every retailer’s wish list, but the generation’s planned spending is down year-over-year, Prosper pointed out. Retailers might focus resources on Generation X who are in their prime earning years and intend to spend more in 2016. This sometime overlooked generation accounts for the largest proportion of planned gift spending, at 34%, followed by Boomers, 31%, Millennials, 21%, and Silent Generation, 13%, Prosper reported.
In the holidays, e-commerce will continue to challenge brick-and-mortar retailing, as shoppers are equally likely to shop at department stores, discount stores and online for their holiday purchases this year. For 2016, consumers told Prosper that they would do 48% of their holiday shopping online, a record high, with younger shoppers planning to do more than half of their purchasing digitally.
“Holiday spirit will likely trump concerns stemming from Washington D.C. this year, but political anxiety may be a minor headwind facing retailers for holiday 2016,” said Pam Goodfellow, principal analyst and consumer insights director for Prosper. “Shoppers are lacking ‘must have’ items on their gift lists and will likely be distracted by ‘experience’ gifts, like cooking classes or spa packages, which cannot be bought via traditional retailers. And don’t forget about Amazon.com. Consumers are poised to win the holiday season due to a highly promotional, competitive selling environment.”