Gift Givers Plan To Splurge On Friends, Family This Holiday Season

Average shopper to do 44% of their holiday shopping online, most in survey's history.

October 16, 2014

It's the most wonderful time of the year for millions of Americans, and according to the National Retail Federation's Holiday Consumer Spending Survey, gift recipients are in for a real treat this holiday season.  NRF's survey found the average person celebrating Christmas, Kwanza and/or Hanukah will spend $804.42, up nearly 5 percent over last year's actual $767.27. 

"Retailers have plenty of reasons to be optimistic this holiday season, and one of the most important pieces of evidence is the confidence holiday shoppers are exuding in their plans to spend on gifts for their loved ones," said NRF President and CEO Matthew Shay.  "While not completely throwing caution to the wind, Americans' frugal spending habits will still be visible this holiday season as they continue to rely on discounts and sales and comparison shop.  Consumers will put retailers to the test when it comes to the product mix and value companies can offer today's shopper who is focused on much more than just price."

The survey found consumers will spend an average of $459.87 on gifts for their family, up 6.5 percent from $432.00 last year, and $80.00 on gifts for friends, up from $75.00 last year.  Those celebrating the holidays will also spend more on gifts for their co-workers ($26.23 vs. $24.52 in 2013), and others like their babysitter and even their pets ($30.43 vs. $26.65).

Spending on traditional items such as decorations and food will remain flat: according to the survey, consumers will spend an average of $104.74 on food, $53.68 on decorations and $29.18 on greeting cards and $20.30 on flowers.

Shoppers shift budgets to make room for others

One of the more popular trends in recent years - self-gifting - will decrease this year as shoppers opt to shift their budgets towards spending on others: 56.9% of holiday shoppers say they plan to take advantage of sales and discounts to purchase non-gift items for themselves or others, and will spend an average of $126.68, down from $134.77 last year.

Mobile, online shopping big focus for consumers this holiday season

If it wasn't official last year, it will be this year - holiday shoppers are eager to shop online for their gifts and other needs.  According to the survey, 56 percent plan to shop online, up from 51.5 percent last year and the most in the survey's 13-year history.  Additionally, the average person plans to do 44.4 percent of their shopping online, the most since NRF first asked in 2006.

Looking for great prices and value as they shop around for holiday items, many consumers will visit discount (61.9%), department (59.7%) and grocery stores (51.2%).  Others will head to clothing or accessories stores (36.7%), electronics (30.8%), drug (19.2%) and craft and fabric stores (18.8%).

As mobile grows in use and scope, consumers this holiday season will turn to their on-the-go devices for a plethora of reasons.  The survey found the majority of smartphone owners (55.7%) will use their device in some fashion, up from 53.8 percent last year.  Specifically, 35.8 percent will research products/prices, the highest amount in the four years NRF has been asking.  Nearly one-quarter (23.9%) will redeem coupons and 19.1 percent will actually purchase items - another survey high.

Almost two-thirds (63.2%) of tablet owners will use their device to research and purchase holiday items, which is the same as last holiday season.  Nearly half (47.4%) will research products and one-third (33%) will purchase items.

More than one-quarter of smartphone/tablet owners comfortable using device to pay for merchandise

For the first time, NRF asked consumers about their comfort level using a smartphone or tablet to pay for merchandise at a store checkout counter.  According to the survey, 27.4 percent said they would be somewhat or very comfortable; however, two in five (41.9%) say they are not very or not at all comfortable paying for items that way.

Broken out by age, 41.1 percent of 25-34 year olds are somewhat or very comfortable using their device to pay for items at the register, compared to just 14.4 percent of those 65+.  Men are much more likely to feel comfortable with the technology (32.6% vs. 22.5% of women).

Four in 10 still shopping before Halloween, mostly to spread out their spending

Early-bird shoppers have already been out and about this year.  The survey found four in 10 (40.4%) begin their holiday shopping before Halloween - consistent with more than 10 years of survey findings.  The survey also found 40.9 percent will begin in November, up slightly from 38.8 percent last year, and 15.5 percent will begin in the first two weeks of December, flat with 16 percent last year.

When asked why they begin shopping for the holiday season as early as September, most agree it helps them spread out their spending (61.9%).  Half choose to do so to avoid holiday crowds (51.7%), and another 51.0 percent say shopping early helps them avoid the stress of last-minute shopping.  Nearly three in 10 (29.9%) say they shop for the holiday season year-round, and more than one-quarter (27.3%) say the desire to get their hands on specific items drives them to shop early; unsurprisingly, 44.7 percent shop early because the deals and promotions are too good to pass up.

Mobile sites, discounts, quality of merchandise factors in consumers' decision to shop somewhere

When it comes to why consumers chose to shop where they do during the holiday season, retailers should take heed: one-quarter of shoppers say easy-to-use mobile websites is an important factor in their decision to shop with a specific retailer.  Those polled also say free shipping/shipping promotions (42.3%) are important factors.  Consumers add that helpful, knowledgeable customer service (30.3%), convenient locations (47.9%), low prices (41.2%) and sales or price discounts (74.7%) also aid in their decision to shop at a particular retailer.

As the market becomes more competitive than ever before, retailers in recent years have begun to stress quality and selection of merchandise, and shoppers are paying attention:  according to the survey, six in 10 say quality of merchandise (60.9%) and selection of merchandise (59.4%) are important factors in their decision to shop somewhere.

"Even with expectations for increased spending this year, smart shopping strategies will be very important to those celebrating the holidays.  Overall, consumers feel better about where they stand compared to a year ago, and as such could find themselves stretching their dollars to give their loved ones a holiday season to remember.  Retailers, however, should still expect to see high demand for sales, coupons and other promotions as shoppers focus on 'what's in it for them'."

Gift cards, jewelry high on wish lists

For the eighth year in a row, gift cards are the most requested gift item among those celebrating the holidays.  According to the survey, 62 percent say they'd most like to receive a gift card, followed by clothing (52.5%), books, CDs, DVDs or video games (43.1%), and electronics (34.6%).  One-quarter (24.8%) say they'd like to receive jewelry, up from 23.3 percent last year.

Economic impact dramatically decreases

When asked if the state of the U.S. economy would impact their holiday spending plans, four in 10 (41.4%) said yes, down almost 20 percent from last year and the lowest amount since NRF first asked in 2009.  Of those who said yes, most agree they will compensate by spending less overall (75.6%).  Others will shop for sales more often (49.0%), comparison shop online more often (34.4%), use coupons more often (37%), buy more practical gifts (28.4%) and use last year's decorations (24.8%).

NRF is forecasting holiday sales to increase 4.1 percent.

Source: National Retail Federation