By Monsi A. Serrano
With Christmas just around the corner, a new study released by IBM’s Institute for Business Value (IBV) revealed the potential rebound of travel and event spending even as traditional shopping seems to be out the window.
IBV’s findings in its global consumer study is that respondents are feeling slightly more festive for the 2021 holiday season than they were in 2020, and are reporting higher household budget allocation for travel and local activities.
However, the survey suggests COVID-19 pandemic-related concerns are hindering the return of the traditional shopping season.
Almost three in four respondents said they’re concerned about new variants of COVID-19, three in five said they’re concerned about interacting with unvaccinated people outside of their families and more than half of those surveyed said they are worried about spending time with unvaccinated family and friends.
Holiday shopping budgets are still 13 percent lower than they were in pre-pandemic 2019; however, they did increase 30 percent year-over-year, and 87 percent of surveyed consumers say they may shop for the holidays this year, up six points compared to 2020.
“The most effective industry leaders may be the ones who can meet the customer where, when and how they want,” said Jonathan Wright, Managing Partner & Global VP for Supply Chain Consulting, IBM Consulting.
“Based on the survey findings, consumer respondents may continue to demand safety requirements for in-person activities, as well as modern-day fulfillment models such as contactless pick-up, same-day delivery; ship-from-store; buy online, pick up in-store, etc. Deploying artificial intelligence, intelligent automation and analytics across an enterprise can build a more adaptable business that can rapidly respond, pivot, and scale up or down, which may be a pivotal enabler when it comes to this holiday shopping season,” added Wright.
Holiday shopping season already started
If there’s anything peculiarly positive about consumer behaviour this year, is that holiday shopping for many of them has started earlier.
Holiday shoppers are concerned about shortages, so to increase their chance of getting everything on their wish lists, more than one in four surveyed adults started shopping in September or earlier.
Twice as many people surveyed plan to start in October as compared to last year and just under half of consumers surveyed plan to jumpstart holiday shopping before November, weeks earlier than the traditional “Black Friday” start date in the US.
Online shopping reigns
While there is notable demand for local products and merchants, online shopping is likely to hold on to its leadership position this holiday season for those surveyed.
This statistic is noteworthy when compared to February 2021 IBV data which found that 73 percent of surveyed shoppers wanted and expected to return to shopping malls and shopping centers after they were vaccinated.
Instead, 43 percent of consumers surveyed say they plan to buy products online and just 36 perent surveyed say they plan to buy products in a physical store, citing the increasing concern about new COVID-19 outbreaks and variants.
Holiday travel, activities could be on rebound
According to the survey, travel is predicted to account for a larger portion of the holiday budgets overall for those surveyed, rising to 8.2 percent from 5.7 percent in 2020. Though still lower than it was in 2019, almost 40percent of respondents said they plan to travel to see family and friends over the holidays, up from 28percent last year. Travel budgets are also on the rebound, up 43percent over 2020, with international lodging and air travel budgets growing more than domestic air travel and lodging budgets for those surveyed. Local outings and activities, as well as dining out, may see the biggest lift in 2021 with consumers surveyed planning to spend 30percent more in this area than they did last year.
Consumers care about sustainability
Environmentally friendly products may also have a leg up this holiday season. Four in five consumers surveyed say they may consider sustainability to some extent when they’re shopping for the holidays this year, which is consistent with last year’s survey results. This group plans to change their behavior by avoiding single-use plastics, shopping locally and buying more products locally or made locally.
The full study is available at: https://www.ibm.com/thought-leadership/institute-business-value/report/2021-holiday-shopping-travel-outlook.
