Online overtakes in-store holiday spend for the first time

Author By Daphne Howland @daphnehowland • Published Oct. 24, 2017 Share it post share tweet Dive Brief: It was a surprise last year when Deloitte found that holiday consumers expected to spend as much online as in stores, but this year that’s gone even further: More than half (51%) of holiday shoppers expect their budgets to go to online spending, compared to 42% who expect to spend in stores, according to Deloitte’s 32nd annual holiday survey, which was emailed to Retail Dive. More than half (55%) plan to shop online for gifts, while 44% plan a trip to mass merchants. No matter where they’ll spend, holiday shoppers are feeling fairly flush. Most (81%) of respondents said their household financial situation is the same or better than last year, up from 63% in 2012. The financial comfort won’t boost spending much — that’s holding steady at an average $1,226 per household. That nearly doubles among those earning $100,000 or more, for an average $2,226. But retailers won't feel the full effects of consumer confidence. While $430 of that will go toward gifts (just a third of the holiday budget), $480 (roughly 40% of the budget) will go toward experiences like holiday entertaining and socializing, according to Deloitte. Dive Insight: Online retailers (or retailers selling online) are poised to see one of their best holiday seasons, and mass merchants will welcome a fair number of holiday shoppers. But department stores, which started the year flagged by Moody’s Investors Service as an especially challenged retail segment, will be a distant third, Deloitte found, with not even a third (28%) planning their holiday shopping at those retailers — down three percentage points from last year. Still, stores with compelling locations will be a draw. "It’s the lure of shopping and the experience that is flourishing and likely to remain in high demand — all which bodes well for retailers that have created an experience blending one-of-a-kind items, inspiration, uncomplicated navigation and frictionless transactions," Rod Sides, vice chairman of Deloitte and U.S. retail, and wholesale and distribution leader, said in a statement. Although the study’s results seem like a breakthrough, retailers should have seen it coming, considering the movement has been evident for quite a while, Sides said. "The amount people are actually spending on gifts remains steady compared with prior surveys, but we’ve watched the mix of total holiday spending shift incrementally over the last five years." While native retail apps appeared to be losing favor a few years ago, more are choosing them now, at a time when consumers are using their phones more than ever to shop. Roughly 1 in 5 (22%) of respondents using smartphones for holiday shopping think they'll pay for purchases in-store with a mobile wallet app. Nearly twice that number (40%) anticipate using a retailer's app on their smartphone and 36% plan to use a mobile payment app during the holiday season, Deloitte found. Retailers with ready-to-go mobile apps will benefit, in large part because digital interactions will shape consumer behavior throughout the season, Sides said. Deloitte found that retailers have a 75% probability of converting a desktop or laptop shopper to a purchaser and a 59% probability of converting a smartphone shopper. "Whether a retailer is online or store-based, their digital influence is one of the strongest cards to play this holiday season," Sides said. "Even though 80% of people said they expect the majority of their shopping will fall in late November onward, decisions about where they’ll shop and what they buy will be largely determined by the digital interactions occurring now." Follow Daphne Howland on Twitter share tweet post email print Filed Under: E-commerce Mobile Commerce Holidays GET THE TOP NEWS Select Newsletter: Retail Dive Topics covered: retail tech, e-commerce, in-store operations, marketing, and more. Daily view sample Select Newsletter: Retail Dive: Marketing Weekly view sample Select Newsletter: Retail Dive: Tech Weekly view sample Select Newsletter: Retail Dive: Mobile Commerce Weekly Email: Sign up A valid email address is required. Please select at least one newsletter. We care about your privacy. 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