EY Holiday Shopping Survey: cost of living crisis spurs festive bargain hunting, but consumers grow skeptical over the real value of sales

• 69% of global consumers enjoy sales events such as Singles Day and Black Friday 
• 64% question the real value of a discount/promotion and 58% find the items they want are not part of the promotion
• 45% of consumers globally are concerned about being able to pay for this festive season with half using loans or credit cards to fund their spending

Consumers’ continued passion for seasonal sales is being fueled by the global cost of living crisis, driving shoppers to seek out more bargains as they try to make their disposable income stretch further. But despite the popularity of sales, there is a growing sense among savvy sales seekers of mistrust towards the real value of the discount or promotion on offer – according to the latest EY Holiday Shopping Survey.

Canvassing 13,000 global consumers on their views and attitudes towards the upcoming holiday sales season revealed that 69% say they enjoy sales events such as Singles Day and Black Friday and look forward to them (rising to 76% for those under 27 years old and 79% for those who have children). However, almost two-thirds (64%) are skeptical of festive sales, questioning the real value of the discount/promotion, with a similar number (58%) finding that the actual items they want to buy are not part of the promotion.

Highlighting the squeeze on disposable incomes, 45% of consumers surveyed globally are concerned about being able to pay for this festive season, rising to 49% of Gen Z consumers (18–27-year-olds), and 57% are planning to participate in sales because of their financial situation.

Sales start early but will consumer spending follow?

Reflecting the highly competitive market and a late Thanksgiving (Thursday, Nov. 28), the festive promotions started earlier this year, with many companies opening their seasonal sales window in September or October. Despite this, more than half of global consumers surveyed (52%) say they won’t start spending their holiday budget until later in the season.

Looking at country variations, 56% and 55% of consumer respondents in Mexico and Brazil respectively are most likely to begin in November, while 31% and 26% in Argentina and Italy respondents are most likely to start in December. The data suggests that many are trusting that better deals will emerge as the seasonal sales unfold and retailers become increasingly motivated to move inventory in preparation for the new year. In fact, six out of 10 consumer respondents say they will only be buying products that are on sale or promotion this year, and 67% are actively tracking the offers in the market to make sure they get the best possible deals – rising to 73% for consumers with children.

Carefree spending a thing of the past?

Shoppers are also being more intentional about when and how they spend, reflecting for many the concerns about the cost of the season. Four out of five (41%) of those surveyed will be using loans or credit cards to fund their spending and buy-now-pay-later solutions will be an increasingly important way of deferring shopping costs, both online and in-store.

More consumers are determined to spend their money well this year. Overall, they are more interested in buying items that promise value that lasts beyond the season. For example, 34% of respondents plan to spend more on technology and 58% plan to reuse last-year’s festive décor. They are also making their holiday budgets go further by, for example, skipping holiday foods and beverages that feel a little too indulgent.

For many consumers festive shopping behavior has nothing to do with bargain hunting. For example, 48% of global consumer respondents say if they find the ideal priority gift they will buy it, whether it is on sale or not.

Rob Holston, EY Global and Americas Consumer Products Sector Leader, says:

"As we approach this festive season, consumer products companies are presented with a unique opportunity to expand their share of the consumer wallet. To truly capitalize on the signature sales events, it's imperative that businesses actively fine-tune their promotions to resonate with the consumer's evolving quest for value. By tailoring promotions that not only attract but also rapidly grow their audience, companies can leverage these events to accelerate growth."

Festive fragmentation: balancing physical stores, social commerce and logistics

The survey reveals that physical stores are still where most consumer respondents (68%) plan to shop this festive season. Many consumers want to see, touch and physically experience a product before they commit to a purchase. In that regard, stores provide a level of confidence that is hard to replicate in the digital space.

However, the digital experience is evolving fast and shrewd, savvy consumers will happily switch between channels to get the optimal deal. Social media platforms will be significant sales channels in their own right this season, with Chinese consumers leading the way – 50% of Chinese consumer respondents plan to make purchases via shoppable social media, compared with 24% in the US, and 17% worldwide.

Malin Andrée, EY Global and EMEIA Retail Leader, says:

“As paths to purchase become less linear, managing the complexity this creates increasingly requires a holistic view across channels. It’s not enough to have a presence in multiple channels; they must be integrated and work seamlessly together. Retail companies must create digital ecosystems that allow for broader consumer insights to allow them to better understand and act faster. They need to be closer to social media – both for its influential aspect but also for consumer and influencer insights. 

“The range of channels available to consumers might seem overwhelming, but EY data shows they are adept at selecting the right channel to meet different shopping needs. While it works for shoppers, for companies it only intensifies the ongoing challenge of channel fragmentation.”

Gen Z preferences point to the future – self-gifting, sustainable and second-hand

Younger consumers are likely to be the most active shoppers this festive season. In fact, about 40% of Gen Z respondents are planning to increase their spending across nearly every category, from clothing to technology to experiences.

The younger generations are prioritizing products that are organic or sustainably sourced, because more than any other generation they actively seek out brands that align with their values. More than a third of Gen Z respondents (35%) plan to purchase second-hand goods as gifts, either to stretch their budgets further or to invest in higher-quality goods that they couldn’t afford new. Some brands are already capitalizing on this trend by establishing or investing more in resale platforms for their own goods.  

One opportunity for companies this festive season is to meet Gen Z’s expectations for convenience. They are more likely to value faster options, free shipping and flexible delivery windows compared to other generations. For example: 40% of Gen Z consumer respondents value two-hour or same-day delivery, compared to just 25% of baby boomers (60–65-year-olds).

While these expectations are challenging to meet in a way that is profitable, they also present opportunities. Nearly half of Gen Z respondents shared that they would buy something for themselves when shopping online to meet a shipping threshold, compared with 35% of those over 60 years old. Companies that fine tune their shipping thresholds with this in mind can drive additional purchases and increase their margins.

Full article available at: ey.com/HolidayShopping

-ends-

Notes to editors

EY is building a better working world by creating new value for clients, people, society and the planet, while building trust in capital markets.

Enabled by data, AI and advanced technology, EY teams help clients shape the future with confidence and develop answers for the most pressing issues of today and tomorrow.

EY teams work across a full spectrum of services in assurance, consulting, tax, strategy and transactions. Fueled by sector insights, a globally connected, multi-disciplinary network and diverse ecosystem partners, EY teams can provide services in more than 150 countries and territories.

All in to shape the future with confidence.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com.