Shoppers are planning on spending cautiously this holiday season, according to a new report from PwC and Strategy&. As many as 72 percent of consumers believe the economic environment is the same or worse than last year. Therefore, 84 percent plan to spend the same or less money than in 2013.
Similar to 2013, consumers are concerned about disposable income, the rising cost of living and insufficient salary, therefore bringing the average household spend down to $684 from $735 last year.
The "2014 Holiday Outlook: Top trends, consumer behaviors and implications for retailers," surveyed 2,200 shoppers nationwide on the 10 big trends that are driving the season.
"The spending divide among shoppers is widening, creating two distinct groups that we are tracking–survivalists and selectionists–and retailers must cater to both segments," said Steven Barr, PwC's U.S. retail and consumer practice leader. "And with shoppers coming to expect a seamless omnichannel experience, deals to woo them into stores and having no tolerance for another season of data privacy invasion, it's a complex retail landscape that retailers need to master–or they risk losing loyal shoppers."
The survivalists, those who make under $50,000 a year, 67 percent of U.S. shoppers, plan to spend about $377 per household on holiday shopping. The selectionists, those making more than $50,000, 33 percent of the population, will spend about $978.
Results from the survey clearly indicate that all shoppers will make purchases based on affordability. Eighty-four percent cited best prices as the reason for choosing a retailer, up from 74 percent in 2013. The second reason for choosing a retailer, 43 percent, is for the frequency and quality of seasonal deals.
The survey revealed that online spending will be up this holiday season as 41 percent of consumers plan to spend more online than in 2013. Specifically, tradeoff shoppers, 39 percent, will shop around and buy online if it's cheaper; transitionalists, 20 percent, will shop online a bit but prefer physical stores; and digitalists, 32 percent, will make online the go-to channel.
And when will this holiday shopping be conducted? Twenty-one percent of holiday spend will occur from now through Thanksgiving weekend; 21 percent over Black Friday week; 50 percent between Thanksgiving and Christmas; and 8 percent of holiday spend will be during the post-holiday sales.
Despite the predictions, retailers are hiring more employees than ever for seasonal positions in anticipation of the holidays. Macy's (NYSE:M) said it plans to hire around 86,000 seasonal positions, an increase of 3.6 percent from the number of employees it hired in 2013. Walmart (NYSE:WMT) said it will hire 10 percent more holiday employees–around 60,000 total–compared to last year. And Kohl's (NYSE:KSS) is adding 34 percent more seasonal workers–a total of 67,000.
In addition, retailers are expecting a big increase in online sales, 86 percent in year-over-year holiday sales, according to a ChannelAdvisor multichannel e-commerce study.
-See this PwC press release
86% of retailers expect an increase in online holiday sales
SMB online holiday sales expected to grow 9%
Weaker holiday sales projected, except for certain retailers
Retailers add 15,200 jobs in September; holiday concerns persist
Retailers add 37,600 jobs in October as holiday hiring shifts into full gear