October through December can be a hectic time for retail in a normal year, let alone during a global pandemic. World and political events of 2020 added an extra kick to the inevitable holiday shopping chaos, though some bright spots have emerged.
Business owners have had to tackle production issues, increased competition in ecommerce, and supply chain disruptions over the past several months as they prepared for Q4. Overall holiday consumer spending is down, and shoppers are pruning their gift lists. In addition, 2020 U.S. election results are expected to further alter holiday shopping behaviors.
On the other hand, more consumers maintained steady spending in Q3 (July to September 2020) than earlier in the pandemic. This suggests a stabilization in consumer spending that could lend a last-quarter boost to an already successful year for ecommerce. Despite job losses and pay cuts, people are still treating themselves—and their pets—to holiday gifts.
Retailers, ecommerce and Amazon sellers, and anyone following these critical end-of-year consumer trends can learn key projections for holiday consumer spending from the new Q4 2020 Consumer Trends Report.
Let’s dive into the full story of how, when, and where consumers will shop for the holidays, as well as who and what made their gift lists.
How much holiday shoppers will spend in 2020
So, how much are consumers willing to spend on holiday goods this year?
In general, holiday shoppers will stick to modest budgets:
- 12% will spend up to $100
- 22% will spend up to $250
- 24% will spend up to $500
- 16% will spend up to $1,000
- 8% will spend up to $2,500
- 5% will spend up to $5,000
- 2% will spend more than $5,000
*11% not applicable
Holiday budgets are lower among those who lost their income or employment due to COVID-19:
- 86% of workers who are furloughed due to the pandemic plan to spend $1,000 or less
- 87% who lost their jobs entirely will spend $1,000 or less, with well over half spending $250 or under.
*About 11% of U.S. consumers won’t shop for the holidays at all this year, many citing the inability to afford gifts. One in three of these non-shoppers are retired, and one in four have seen their household income decrease since Q3.
The maximum amount consumers would spend on a single gift
Just under two-thirds of consumers will spend a maximum of $100 on a single gift this year.
- 17% would pay no more than $25 on a single gift
- 21% would pay $26-50
- 12% would pay $51-75
- 15% would pay $76-100
- 12% would pay $101-250
- 6% would pay $251-500
- 4% would pay $501-1,000
- 3% would pay more than $1,000
*And ~10% will not purchase gifts.
Holiday spending in 2020 versus 2019
Though around a quarter of consumers will exceed their holiday spending from 2019, slightly more will cut back on gifts and other holiday purchases this year.
Compared to 2019:
- 24% plan to spend more on holiday shopping
- 41% plan to spend the same amount
- 25% plan to spend less
*11% not applicable
Many consumers will adjust their holiday spending based on the results of the U.S. Presidential election this November. 32% of Donald Trump voters say they’ll reduce their holiday spending because Joe Biden won, while 22% of Biden voters will increase their holiday spending.
Pandemic-related government policy will influence Q4 consumer behavior as well. 23% of U.S. consumers plan to reduce their 2020 holiday spending in the absence of a new stimulus package.
Check out more of our insights on how consumers will adjust their holiday spending based on the results of the 2020 Presidential election and other political events of this year.
When consumers plan to start their holiday shopping
By Thanksgiving weekend, 68% of consumers have already begun shopping for the holidays, with 35% taking advantage of sale events online. One third of consumers kicked off their holiday product searches by the beginning of October.
When consumers begin their holiday shopping:
- Beginning of October: 33%
- Prime Day (October 13-14): 19%
- Black Friday or Cyber Monday: 16%
- December: 17%
- 11% are not doing any holiday shopping this year
*Remaining 4% responded “Other.”
Where consumers will shop for the holidays
Based on 2020 increases in online spending, projected online versus in-store participation for big sale events, and strong preferences for online holiday shopping, it appears that most consumers will purchase holiday goods at home (on their computers, tablets, and phones) instead of in stores.
The Top 15 Retail Stores & Sites Where Consumers Are Shopping
|Outlet||Percent of Consumers|
|Home Depot (store)||14%|
|Sam’s Club (store)||8%|
|Best Buy (in store)||6%|
*By Q3 2020 dates; see Consumer Trends Report for full list
Amazon is consumers’ most popular online shopping destination. In fact, 70% of consumers shopped on Amazon in Q3, double the number who shopped on Walmart’s or Target’s online stores.
In nearly every holiday product category, shoppers are more likely to make purchases online than in-store. And when browsing the web for gifts, home decor, gift wrapping supplies, party supplies, and holiday apparel, more consumers will choose Amazon than any other online outlet.
|Category||In-store||On Amazon||Online – other|
|Holiday home decor (indoor/outdoor)||33%||29%||11%|
|Gift wrapping supplies||42%||26%||10%|
*For percentages that don’t add to 100, consumers responded that they don’t plan to buy these items.
This reflects a widespread shift to online shopping over the course of the pandemic, with Amazon leading both ecommerce platforms and brick-and-mortar outlets in popularity.
The holiday items consumers plan to buy
Consumers plan to spend on gifts and other celebratory items this holiday season.
- 91% of consumers plan to buy gifts this year
- 86% will buy holiday food and beverages
- 78% will buy gift wrapping supplies
- 72% will buy holiday home decor
- 72% will buy entertainment or party supplies
- 69% will purchase holiday apparel
Shoppers plan to think outside the box this year when searching for gifts. Here are some popular strategies holiday shoppers plan to implement:
- 17% plan to buy holiday gifts based on ideas they get from social media
- 14% are willing to pay full-price for luxury items as gifts
- 19% had made a wish list for themselves by early October
Gifts may be less festively adorned this year: only 15% of consumers say they opt for gift wrapping services when shopping online, and 22% won’t buy holiday gift wrapping supplies at all.
Who people are buying gifts for
Children are the big winners this year in terms of gift recipients: 44% of consumers say they will purchase gifts for their kids.
In second place are partners/spouses, followed by parents and friends.
Who will consumers buy gifts for this year?
- My child/children: 44%
- My partner/spouse: 42%
- Parents: 36%
- Friends: 30%
- Siblings: 28%
- Myself: 26%
- My pets: 23%
- Extended family: 21%
- In-laws: 12%
- Grandparents: 9%
- Neighbors: 8%
- Coworkers: 8%
- Essential workers: 5%
1 in 4 U.S. consumers plans to buy holiday gifts for themselves this year — as with pets, that’s more than the number of consumers planning to shop for in-laws, grandparents, neighbors, coworkers, and essential workers.
Recent changes to household income may affect a consumer’s decision to spend on themselves. 20% of consumers who reported that their income is lower than it was in Q3 plan to buy gifts for themselves, versus 26% of those whose income is the same, and 29% of those whose income is now higher than it was three months ago.
Q4 2020 will be unlike any other
2020 has brought many shifts in consumer behavior, with more yet to come as the year draws to a close.
Holiday shopping is now in full swing for over two thirds of U.S. consumers. As they cross the final names off of their gift lists—and late holiday shoppers begin to work on theirs—they will continue to support 2020’s ecommerce boom.
For more information on consumer behavior in Q4 2020 and beyond, check out the full Consumer Trends Report.