PwC U.S. Holiday Outlook 2021

Christmas illustration - Source PwC
PwC U.S. Holiday Outlook 2021

Will this holiday sparkle? Consumers are ready to bring the shine

Will this holiday sparkle? Consumers are ready to bring the shine

Consumers are ready to celebrate this year. They want to shop and travel and make merry after more than a year of various forms of pandemic-related abstinence. They're still wary about public-health considerations in the wake of the variants. But for many, the vaccine has offered more freedom to participate in the activities they associate with the most wonderful time of the year.

In fact, overall trendlines are up this holiday, with only a small percentage of consumers — less than 20% — telling us the pandemic could significantly dampen holiday spending. To find out more about consumer expectations and intentions for the season, we asked 1,000+ consumers where and when they will shop and travel — as well as what drives their purchasing decisions.

Spendy millennials power the uptick

With an average budget of $1,646 (vs $1,447 for all consumers), millennials (ages 26-39) will spend the most this holiday season. In fact, just over 20% of them told us the pandemic actually had a positive impact on their holiday budgets; lockdowns and economic uncertainty in 2020 generated a boost in savings for many high-earning professionals.

More likely to shop by smartphone than consumers overall, they also favor in-store pickup more than other age groups. Eager to travel this holiday, they are more interested in shopping with environmentally and socially responsible brands than other age groups. Social media is their preferred venue to seek out information about a company’s environmental, social and governance (ESG) practices (66% vs 49% for all consumers).

Uneven recovery widens holiday budget gap

For some consumers, especially high-earning professionals, the pandemic boosted savings rates. Big spenders this holiday are city-dwellers younger than 45; most earn above median household income ($65,000) and aren’t as price-conscious. They plan to travel this holiday. Loyal to environmentally sustainable brands, they prize speed and convenience during holiday shopping.

Conversely, price dominates purchasing decisions for value shoppers, who tend to live in suburban or rural areas, earn less than $65,000 in household income and are unlikely to travel this holiday. The pandemic served to shine a spotlight on existing fissures in disposable income: Consumers with household incomes of $150,000 and more will spend almost double the average this holiday: $2,733 (vs $1,447 for all consumers).

More than a quarter of Gen Z consumers (26%) told us the pandemic will significantly dampen spending this holiday.

Trust takes center stage

More than ever before, brand trust matters to consumers: An overwhelming 92% of them told us it is top of mind during holiday shopping, a remarkable increase over the 70% we’ve recorded in previous years.

In an environment where shoppers care about public-health issues when they shop in stores and cybersecurity and privacy issues when they shop online, brand trust is in much sharper focus this year.

And who better to trust than someone you know? Someone who will continue to keep your community economically vibrant: 85% of shoppers said local stores and independent retailers will figure prominently in their purchasing decisions.

In the context of business being the only institution seen as both competent and ethical, according to the 2021 Edelman Trust Barometer, retailers are well-positioned to fulfill the promise of trust that consumers seek.

The vast majority of consumers (80%) told us that their trust in consumer-facing companies has stayed the same or increased in the wake of the pandemic.

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