After being cooped up in their homes for the past two years during the holidays because of the COVID-19 pandemic, consumers are ready to spend, shop, and celebrate. This is one of the key findings of IBM’s Institute for Business Value (IBV) annual global holiday shopping and travel report.
This is despite the challenges, that range from economic to political, plaguing the world today. However, the study found almost 2 in 3 plan to pre-order this holiday season to get their products on-time with guaranteed prices.
The study found that 2022 shopping budgets are up 8% over 2021, in line with Bain’s economic forecast, and holiday travel budgets are up by almost half. However, factors including inflation and price increases have made economic concerns top of mind this holiday season. While 59% of consumers surveyed say they will be less concerned about COVID-19, 2 in 3 say they will be more concerned about the economy while 59% of respondents report worrying more about supply chain disruptions that could make holiday shopping harder or more expensive.
“According to the survey results, in 2022, consumers are hoping to re-embrace holiday traditions they’ve had to alter for the past two years,” said Karl Haller, partner, Consumer Center of Competency Leader, IBM Consulting. “They’re starting their shopping and travel planning earlier but also want to hedge their bets with options like free returns or cancellations. To adapt to these changes in consumer behavior, retailers will need better visibility and traceability across product inventory, fulfillment, and returns. AI can help them understand, prioritize, and resolve critical issues in real-time.”
Free cancellations and other perks
As COVID-19 pandemic concerns abate for many consumers, worries are shifting toward uncertain economic and supply chain conditions this holiday season.
Nearly half of consumers surveyed will spend less if inflation continues to drive price increases. If they’re forced to cut their holiday shopping budget, over 60% will cut the non-essential categories like apparel, footwear, jewelry, and accessories.
If goods are not available due to supply chain issues, 41% of respondents say they will spend less — but 30% will spend more if they can find substitutions easily. If gas prices go down, 35% of consumers surveyed will do more in-store shopping.
At the same time, consumers want to keep their options open. Nearly 7 in 10 respondents surveyed will opt for brands or retailers that offer free cancellations, order changes, and returns, as well as a COVID-19-safe environment this holiday season.
“The study findings seem to indicate these perks are often worth the price due to the continued worries around supply chain and product availability this season,” the report stated.
Travel is also an area where consumers are looking to get back to normal, while still mitigating any risk associated with potential price changes due to inflation and fluctuating gas prices. The study found that average travel demand will go up by 9% during the holiday season and 78% of consumers surveyed are planning to purchase their airfare before October (61%) or in October (17%).
To better understand consumer perspectives, as well as their plans to shop and travel this holiday season, the IBM IBV surveyed more than 12,000 adults across nine countries (Brazil, Canada, France, Germany, India, Mexico, Spain, United Kingdom, United States) in August 2022.