Will Americans give the gift of nothing this holiday?
Much of the focus of retailers’ concerns about the upcoming holiday season has centered around being unable to meet customer demand for gifts, and losing out accordingly. Retailers, however, may be facing a different problem. New research finds that many customers are not planning to buy gifts at all for the 2021 holiday season.
One in four shoppers are planning on foregoing holiday presents this Christmas season due to COVID-19, according to WalletHub’s “Coronavirus and Holiday Shopping Survey.” Sixty-nine million consumers think they will spend less on the holiday than they did last year.
These findings could be the result of a number of factors.
While the U.S. economy has recovered to some extent from the precarious state that began with the lockdowns of March, 2020, this year the consumer marketplace has experienced waves of price increases, which may make customers more wary of spending on gifts.
Last week, inflation in the U.S. rose to a 30-year high, according to CNN.
Federal COVID-19 stimulus has also come to an end, which means less disposable income to spend on non-essentials like holiday gifts, although some U.S. states have begun implementing additional stimulus payouts and extended benefits for those who continue to be financially impacted by the pandemic.
The ongoing pandemic and the perception that it could continue to be a concern indefinitely may also be putting a damper on the festive mood associated with holiday gift giving. Fifty-three percent of WalletHub survey respondents said they would pay extra for “peace and quiet” this holiday season.
Not needing to meet an outsize demand for gifts could give retailers a bit of breathing room this season, though, given the difficulties securing products for their shelves.
Supply chain disruptions, resulting from bottlenecks in overseas shipping and labor shortages preventing product from being moved from ports, have led to ongoing issues with out-of-stocks throughout 2021.
There have also been segment-specific supply chain problems. In technology, for instance, there has been an ongoing shortage of computer chips which some expect to extend into 2022.
- Coronavirus and Holiday Shopping Survey – WalletHub
- US inflation rate hits 30-year high – CNN
- 4th Stimulus Check Update: The states still giving out stimulus checks – Marca
- How bad will product shortages get this time? – RetailWire
DISCUSSION QUESTIONS: Should retailers be concerned about shoppers skipping out on gift giving this year? In what ways might retailers be able to mitigate losses sustained if holiday gift giving is lower than normal?
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15 Comments on "Will Americans give the gift of nothing this holiday?"
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Chief Accelerant at Incendio & Forbes Contributing Writer
We’re bombarded with gift-giving messages starting in October — now 25 percent of the year is devoted to holiday advertising! While I don’t think people will skip giving gifts, I do think they will downsize them given how far consumers’ dollars are (not) stretching these days.
Founder, CEO & Author, HeadCount Corporation
I can’t imagine retailers getting more concerned than they already are given the multitude of challenges that they are already facing. Consumer sentiment is just another one of many. There are both headwinds and tailwinds buffeting retailers for this upcoming holiday season. It’s very difficult to predict how things will play out, and given that we’re now in the middle of November, all that retailers can do is execute their holiday plans as best they can.
President, Spieckerman Retail
It depends. As the gap between the “haves” and the “have nots” widens, some consumers will splurge and spoil family members while others may pare down. Sales of higher-margin discretionary categories like apparel, home, and jewelry are already on the uptick so success is defined as much by “what” as it is by “how much.” Either way, if the deals are compelling enough, consumers will shop for themselves as well.
Managing Director, GlobalData
I do not think people will skip giving gifts. I also don’t think most people will spend less. All of the evidence suggests this will be a bumper holiday season all around – albeit with some growth being boosted by inflation. That said, people are more conscious of buying relevant gifts and not just wasting money on fripperies.
Chief Accelerant at Incendio & Forbes Contributing Writer
You get my vote for the use of the word “fripperies”! Love it.
Principal, KIZER & BENDER Speaking
We need to stop buying trouble. The headlines are horrific, almost celebratory about what’s happening at retail right now. Yes Holiday 2021 will be different from other years, but it won’t prevent people from celebrating. We may have limited choices and spend less but nothing can stop holiday gift giving.
Retailers need to be extra creative in their marketing, and take more care merchandising the sales floor to encourage shopping, but I think they are up to the task.
It is inarguable that consumer behavior has changed over the past two years. In addition to the change created by pandemic-related retailer changes and shopper expectations, demographic differences between previous generations and the ascendant Gen Z are significant. With different values about “consumerism” and different financial wherewithal, they are increasingly influencing the “what, why, and how” of retail.
This demographic is increasingly placing emphasis on social responsibility, individuality/niche products, and social media as their info channel – a seemingly contradictory trio. But this doesn’t mean that they aren’t willing to spend. They will, but the sales process will need to adapt: messaging (content and channel), personalization (products and customer service), and social credibility/approval.
Principal, Retailing In Focus LLC
The biggest inflationary pressure seems to be coming from gas, food and winter utilities. Yes, it may hamper other discretionary spending, but personal savings are at all time highs because of the lack of consumption for the past 18 months.
The NRF reported a 25 percent increase in Halloween spending vs. 2020 (admittedly a comparison against depressed numbers but also a record high). That may be a hopeful sign of things to come between now and the end of the year.
Founder, CEO, Black Monk Consulting
First of all, let’s step back a minute and take one very deep breath — or 69 million. WalletHub’s survey results are based on a sample of “over 300” respondents. One is forced to assume the actual number is lower than 401, otherwise they would have said, “over 400.” Like many BrainTrusters I have done a ton of consumer research and I’m not sure I’ve ever seen a survey of 300 folks that was (accurately) projectable to the entire U.S. population. Second, doesn’t all this depend on a variety of factors including reaction to inflation, continued supply chain disruption, household income increases or decreases, whether or not we see another COVID-19 surge, the potential emergence of a COVID-19 variant, etc.? In other words isn’t this a slightly more multi-dimensional problem? Now that all that’s out of the way, the short answer is, “Of course!” With this much uncertainty, what retailer wouldn’t be at least a tad bearish? As to the second question isn’t that what post-Christmas discounts are for?
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Supply chain issues will definitely have a negative impact. However a healthy stock market and strong family income will portend continued spending. This is the holiday season of electronic gift cards. Bundle these with some in-store late winter/early spring promotions and you’ll have a potential mitigating option to no holiday gifts this year.
VP Planning, TPN Retail
I’m not convinced that people will give “nothing.” However I believe holiday gift-giving ambitions will likely be scaled back. That could be disappointing news for retailers and brands, but also a bit of a relief on the supply chain.
Just for fun – here’s my plan: I will be giving “vouchers” for experiences or services. My mother asked me for a voucher to have super-duper cleaners come and do a deep clean of her house. Another voucher goes to my husband for a mini three-day vacation, for the weekend of his choosing. The rest are stocking stuffers – just so we have things to open.
Founder, Branded Ground
You know what I thought about when I read this? How many people might be gifting upcycled items instead of new ones. I’m not sure if it would be perceived as tacky, but the sales trends are shooting skyward regarding gently used purchases. So, at what point might it be acceptable to gift them too? And how might THIS affect holiday, especially given the challenges with inventory.
CFO, Weisner Steel
I’ll believe it when I don’t see it. Frankly this sounds to me like a narrative searching for reality: 69M plan to give less? Well that might be a concern it this were Germany — pop ~80MM — but there are more than 300MM here … and by my math that leaves >200MM who will give the same or more. Are there, then, no concerns? Of course not … things are still far from “normal.” But fear of a budding Srooge-ism should be far down on the list.
VP of Marketing, FluidLogic
Yes and no.
Yes because for the foreseeable future, the holiday season will not be business as usual. Our lifestyles have changed, priorities, social occasions, and even gift giving occasions. So, if the retail business model, the point of difference and reason to be in the consumer’s life has not been modified to meet the current reality, the retailer should be concerned.
And no, retailers should not be concerned if they have been paying attention to consumers. It’s a great opportunity to utilize more e-commerce, new gift giving ideas, or capitalize on all the emerging consumer’s needs or wants.
Editor Emeritus & Co-Founder, Frozen & Refrigerated Buyer
I believe this research was done by the team of Ebenezer Scrooge and Chicken Little.