KPMG Survey: U.S. Consumers to Spend 4% More on 2024 Holiday Shopping Amid Significant Shift in Shopping Behavior

(October 21, 2024)—U.S. consumers are set to spend 4% more on holiday shopping this year, with average spending projected to reach $948, compared to $911 in 2023, according to the KPMG 2024 Consumer Holiday Shopping Survey. Shoppers are gearing up for a strong holiday season, signaling significant opportunities for retailers that can balance value and consumer experience.

"Consumers overall are showing a consistent pattern for spend between our Fall survey and Holiday survey across a number of key categories," said Duleep Rodrigo, KPMG U.S. Consumer and Retail Sector Leader. “Interestingly, when we asked about spending in general and payment methods, more than a third of Millennials use buy-now pay later options. That’s the highest usage by far among the four generations.”

Key Findings:

• Increased Spending Across Income Groups:
  • 49% of consumers expect to increase their holiday spending. Notably, those households earning between $50,000 and $99,000 anticipate raising their spending by 10%.

"Understanding consumer segments has never been more important. Retailers who have the deepest data and analytics on preferences by income group can have the greatest success with targeted products and promotions," Rodrigo added.

• Shift in Retail Preferences:
  • Mass-market retailers remain the top holiday shopping destination for 71% of consumers, with shoppers moving away from luxury stores (19%) and dollar stores (31%). In 2023, 25% of consumers favored luxury stores and 35% preferred dollar stores, highlighting a notable shift in consumer preferences towards value-driven retailers.

"Consumers are seeking value and convenience, making mass-market retailers the preferred choice. Retailers should focus on providing a seamless shopping experience and competitive pricing to attract customers," Rodrigo emphasized.

Evolving Shopping Behavior:

The survey also revealed significant changes in how consumers research and purchase during the holiday season:

• 62% of consumers plan to use retailer websites for research, up from 60% last year.
• 54% will use brand websites, also up from 51% in 2023.
• Meanwhile, reliance on social media and influencers for shopping insights dropped to 25% from 30% last year, indicating a decline in the influence of social platforms on holiday purchase decisions.

"Consumers continue to demand to shop on-line and retailers must invest in their online platforms to provide a seamless and informative shopping experience. This includes optimizing retailer and brand websites to deliver relevant information and personalized recommendations," said Rodrigo.

Online Shopping Continues to Dominate:

Most holiday shoppers, 39%, still prefer online shopping, while only 19% prefer in-store shopping, maintaining a similar trend from 2023.

Consumers Prioritize Value Over Brand Reputation:

When selecting retailers, price and product quality emerged as the top decision factors across 15 product categories, with brand reputation not among the top three in any category. Brand reputation only ranked in the top five in six categories, including electronics & appliances, jewelry, and travel.

"This highlights the importance of value in consumer decision-making as price continues to be the number one factor for holiday shopping decisions," said Rodrigo.

Black Friday Remains the Most Important Sales Event:

61% of consumers cited Black Friday as the most important sales event, with declining interest in End-of-Season (28%) and Friends & Family sales (19%) compared to last year.

"Retailers should continue to leverage the popularity of Black Friday while also exploring new ways to engage consumers during other sales events. Understanding consumer preferences and adjusting promotional strategies accordingly will be key," Rodrigo advised.

Other Notable Findings:

• Greater Spend on Self-indulgence: Half of the consumers will shop for themselves this holiday season and anticipate spending 21% more.
• Key Holiday Shopping months: November remains the time to shop as 42% plan to start then, while another 31% aim to begin shopping in October.
• Reduced Holiday Event Spending: Consumers expect to host and attend more gatherings, but average spending per event is expected to drop 11%, from $89 to $80.

The 2024 KPMG Consumer Holiday Shopping Survey illustrates clear trends toward value-driven shopping, the growing importance of online research, and the enduring relevance of Black Friday sales. Retailers that can provide a strong mix of pricing, quality, and convenience stand to gain the most this holiday season.

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