Cost of living concerns spur festive bargain hunting, but consumers sceptical over the real value of sales - EY Holiday Shopping Survey

• 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
• Almost two thirds (64%) question the real value of a discount/promotion
• Nearly half of Gen Z respondents would buy something for themselves when shopping online to meet a free shipping threshold
• Majority of consumers (68%) plan to shop in physical stores this festive season, but consumers increasingly happy to switch between stores and digital platforms in search of the best deal

Dublin, 12 December 2024: Ongoing cost of living concerns are driving shoppers globally to seek out more bargains as they try to make their disposable income stretch further. But despite the increasing popularity of sales before, during and after the holiday season, there is a growing scepticism amongst consumers towards the real value of the discount or promotion on offer, according to the latest EY Holiday Shopping Survey.

Highlighting the continued squeeze on disposable incomes, 57% are planning to participate in sales because of their financial situation. Interestingly however almost two-thirds (64%) are sceptical of festive sales, questioning the real value of the discount/promotion. Furthermore, more than half (58%) say that the actual items they want to buy are not part of the promotion.

The survey of 13,000 global consumers on their views and attitudes towards the Christmas and holiday shopping season revealed that almost half (45%) of consumers surveyed are concerned about being able to pay for this festive season, rising to 49% of Gen Z consumers (18–27-year-olds).  

Globally, more than four in ten (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.

Maximising value

This festive season shoppers are being more intentional about if, when and how they spend. More consumers want to spend their money on items that promise value that lasts beyond the season, for example, more than a third (34%) of respondents plan to spend more on technology. On the other hand, consumers are choosing not to spend in certain categories, for example, more than half (58%) plan to reuse last-year’s festive décor.

Colette Devey, EY Ireland Consulting Partner and Consumer Sector Lead, says: "Similar to the consumers surveyed globally, Irish shoppers are on the hunt for the best value when it comes to festive purchases. To capitalise on this seasonal shopping period into the new year, it's imperative that Irish businesses fine-tune their promotions to deliver the consumer's perception of value for money. By offering promotions that are seen to deliver genuine value, companies will build brand loyalty with consumers long beyond this festive season."

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

Globally, 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.

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.

The younger generations are prioritising 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 capitalising on this trend by establishing or investing more in resale platforms for their own goods. 

Physical stores ahead of digital

The research reveals that physical stores are still where most consumers globally (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.

Colette Devey says: “As shoppers diversify the ways in which they make purchases, managing the complexity this creates for retailers requires a comprehensive view across all sales channels. It’s not enough to just have a presence in multiple sales channels; they must be integrated and work seamlessly together. Retail companies must also 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. While social media is effective for brand awareness in Ireland, it is not the primary channel for direct sales. However, as our recent Future Consumer Index shows, social media influencers significantly impact Irish consumer behaviour, with 39% interacting with them, 67% trusting them, and 58% making purchases based on their recommendations.”

Tracking the best deals

Despite many companies starting seasonal sales promotions as early as September this year, more than half of global consumers surveyed (52%) said they won’t start spending their holiday budget until later in the season. This varied across countries. While 56% of consumer respondents in Mexico and 55% Brazil were most likely to begin shopping in November, 31% in Argentina and 26% in Italy are most likely to start in December. The data suggests that many consumers 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, 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.

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