There’s one US demographic that could ensure an exceptionally strong Holiday shopping season this year: millennials. Not only will they exceed Baby Boomers as the largest living adult population next year, but they are already the biggest generation in the US labor force (Pew Research). These stats, paired with recent strong US wage gains, should help boost their spending in the coming weeks.
The prospect of millennials bolstering Holiday sales over the next 5 weeks is very promising, according to Accenture’s 12th Annual Holiday Shopping Survey. Here’s all the details on what to expect based on their online survey of 1,500 American consumers:
- Americans overall will spend more on holiday shopping this year than last, but older millennials will spend the most by over $100/person. US consumers plan on spending $658 this year versus $632 in 2017, while older millennials (ages 28-37) plan on spending an average of $779.
- Almost half (49%) of younger millennials (ages 21-27) also say they will spend more than last year compared to just 13% of baby boomers (ages 55 and older). Overall, a little over half (53%) of participants said they would spend as much as last year, while just over a third (36%) said they would spend more; only 11% said they plan to spend less.
- Retailers that promote inclusion and diversity – relative to age, gender, ethnicity and disability – will win out versus their competitors with millennial shoppers. Over half (54%) of younger millennials believe “retailers have a responsibility and duty toward addressing wider social and political issues with regards to diversity”. A similar share (51%) are “more likely to shop at a retailer that demonstrates awareness of such issues”. This also includes their experience in a store: nearly a third (31%) of younger millennials “see diversity in the workplace – with regards to staffing, as an important attribute when it comes to deciding where to shop.”
Moreover, “Millennials are more likely to choose one brand over another if that brand demonstrates inclusion and diversity in terms of its promotions and offers (cited by 70% of younger millennial respondents and 69% of older millennials), their in-store experience (66% of younger and 72% of older millennials), their product range (68% of younger and 70% of older millennials), and their environmental awareness (61% of younger and 57% of older millennials).”
The survey also captured some other important trends and consumer preferences to look out for when evaluating various retailers’ approaches to the Holidays:
- The report notes that consumers are less price sensitive this year. More Americans also said they would pay extra to buy all their gifts in one place and fewer said they would utilize cost-savings programs or benefits like special e-mail offers or deal sites. All that is very good news for retailers, for whom Holiday discounting is a perennial make-or-break issue.
- Fewer US consumers plan on buying physical products as gifts compared to last year (down 11 percentage points to 73%). Rather, more plan on buying experience or service gifts (up 5 percentage points to 49%), including everything from travel and concerts to home cleaning and spa treatments.
- Social media also continues to grow in influence: the “percentage of respondents planning to use social-media sites for their holiday shopping this year nearly doubled, to 15% from 8% last year. In addition, the percentage who said they check Instagram before looking or buying elsewhere online more than doubled, to 14% from just 6% last year.”
In sum, this Holiday season should top last year’s comps with millennials leading the charge. Strong data starting with Black Friday and Cyber Monday should also help lift sentiment as investors look ahead to Q4 earnings results with just one month left in the year. With distinct and growing trends – social media use, shift towards experiential/service gifts and millennials’ preference for brands that promote diversity/inclusion – there should also be clear winners relative to which retailers perform best.