The holiday season is the busiest time of the year for most retailers in the US – and across the world for that matter. This year, however, the sound of cash registers will be reduced significantly. Instead, shopping will be done online now more than ever. As the world is faced with pandemic-related challenges, many people plan to cut down on usual holiday shopping, stripping purchases to essentials and re-organizing priorities.
But is there still room for some holiday cheer, exchanging gifts and stimulating the economy in the process? Who is going against the odds and is planning a “close to normal” holiday season?
Our research team at StorageCafe conducted a survey that investigated people’s attitudes towards holiday-related spending in 2020. As we went through more than 2,000 responses, we were able to identify some interesting facts:
- 49% of holiday shoppers intend to spend less this year with 32% of respondents planning to avoid holiday shopping altogether
- Americans plan to spend $767 on average for holiday shopping
- 1 in 2 Americans intend to spend less than $299 on non-gifts for family and household purchases
- About 40% of respondents anticipate spending less than $299 on gifts this holiday season
- Only 6% of shoppers account for “big spender” habits, with planned gift expenses in excess of $2,000
- Clothing, footwear and accessories are the most popular gifts to give, but home décor and jewelry are also on the regular gift shopping lists
- 1 in 3 Americans plan on spending most on their children and the least on co-workers and other people
- About 50% of respondents plan on using monthly income to cover the cost of holiday shopping
- Secret Santa grinches rejoice: nearly 70% of respondents will not engage in Secret Santa activities
32% of Americans planning no holiday shopping with 49% of holiday shoppers intent on spending less this year
This holiday season is the most irregular in recent American history, to say the least. Ever since 2008, holiday budgets had been gradually growing Y-o-Y. This year, only 10% of respondents say they plan to increase their holiday spending budget. More than one in three Americans (32%) declare they intend to do no holiday shopping this year and almost one in two Americans (49%) say they plan to spend less than in 2019. Roughly 40% of shoppers claim they wish to spend the same amount as in the previous year.
Most people saying “no” to holiday shopping this year (40% of respondents) have incomes below $49,000/year. The same income group is more likely to spend less than last year even if holiday shopping is still on. About 26% of people earning over $200,000/year also declared that they wish to skip holiday shopping, indicating a shift in everyone’s perspective this year. An additional 27% of high-income earners who plan on keeping the holiday shopping tradition say they will most likely reduce their holiday expenses in 2020.
The most cited reasons for reducing and canceling holiday shopping is having less income or a pay cut (38% of respondents) and worrying about the economy is the main reason for those canceling their shopping (30%).
Americans are set to spend $767 overall on average for the 2020 holiday season
Even if pandemic-related concerns have created a less generalized interest in shopping, most people are still looking forward to traditional holiday shopping. 68% of respondents say they will still engage in gifting and celebrating, with an average estimated spending budget of around $767 this holiday season, based on their self-reporting.
Positivism and emotional connection make the holidays so special and this year more than ever, we all need a strong dose of that. In fact, professor Charles Aaron Lawry at Purdue thinks that “people are craving social and emotional connections due to social distancing and lockdowns, and the primordial act of exchanging gifts will help many people supplant those psychosocial needs.”
12% of survey respondents say they plan to spend between $1,000 – $1,500. Almost 40% of Americans declare they intend to spend less than $499 for the holiday season in 2020, followed closely by 36% of them who claim they intend to spend between $500-$999.
The holiday spending behavior is heavily influenced by income levels. While the majority of those earning $200,000 and more tend to spend $2,000 (39%), lower-income brackets correspond to more modest holiday budgets.
Across all age groups, spending less than $499 is the dominating trend. However, about 8% of both people aged 18-34 and those between 34-54 say they’re committing to allocating more than $2,000 to cover the cost of holiday expenses.
Most women (42%) declare they wish to spend less than $499 this holiday season overall, while most men (36%) say they intend to spend a little more, namely between $500-$900 on their holiday shopping. About 11% of men claimed they intend to dish out over $2,000 for the holiday season, while only 6% of women declared their intention of spending the same amount for the holidays in 2020.
About 80% of Americans say they plan on spending most on Christmas, followed by Thanksgiving (10%). While on the whole people expect to spend the least on New Year’s Eve, around 4% of them anticipate spending the most on this holiday.
People in Orlando, FL turn out to be the biggest holiday spenders in the US
Looking at shopping behavior in some of America’s biggest cities, we found that people in Orlando plan on spending most, with an estimated average budget of $1,000 for the holidays. Orlando is followed by New York City, with people here declaring they intend to spend about $914 for the 2020 holiday season. Americans in LA plan on spending even less, as most of them anticipate having a holiday budget of about $770. People in Phoenix have the smallest holiday budget among big cities, as they are expecting to spend about $517.
The average person plans to spend less than $299 on gifts in 2020
Across the country, about 40% of Americans claim they will spend less than $299 on gifts this year. An even smaller share of them (22%) declare they want to allocate between $300-$499 for gifts in 2020. A small fraction of people (4%) say they are willing to dedicate between $1,500- $1,999 for gifts this season. Surprisingly, about 6% of people claim they intend to spend over $2,000 for the same purpose — 2% more than those in the previous budget bracket.
While nationally people refrain from spending more on gifts, about 35% of people earning more than $200,000/year say they will spend over $2,000 on gifts this holiday season. About 8% of those earning between $100,000-$199,999 per year declare they will dedicate the same sum to gift purchases. A small fraction of people with an annual income between $50,000-$99,999 (4%) and an even smaller one of those earning $49,999 or less per year earners (2%) prefer to spend over $2,000 for this purpose as well.
Splurging on gifts might not be for everyone of all ages in 2020, but a small fraction of people still declare they’d like to spend a little more. About 7% of people ages 18-34 claim they wish to spend over $2,000 on their gift shopping spree this holiday. Only 6% of respondents over 55 and about 4% of those aged 34-54 declared they would spend the same amount on gifts in 2020.
A similar pattern emerges among men and women: the majority of people of both genders plan to temper their gift spending this year, but a few of them still want to be more generous with their gift purchases. More men (8%) than women (5%) seem to favor spending over $2,000 on gifts this season.
Clothing, footwear and accessories are Americans’ favorite gift to give
What types of gifts do Americans enjoy giving the most? According to our survey, it appears that clothing, footwear and accessories were the number one gift, with 23% of respondents claiming to give these kinds of items as holiday presents. Toys and electronics, video games, and other games all tied for the second favorite type of gift, with 13% of people expressing their equal preference for both kinds of gifts.
Home décor and jewelry (8%) are two types of presents that people enjoy giving as a gift during the holidays. Moreover, holiday decorations (6%) and sporting and fitness equipment (5%) might not be as popular as other types of gifts, but they’ll land under many people’s tree this year.
Gift cards have lost most of their appeal as a gift in 2020, with only 1.5% of Americans saying they intend to give them away as presents during this holiday season.
Luxury items still to be purchased, although the large majority of people turn to essentials for gifting
Clothing, footwear and accessories seem to be the first choice for a present among Americans of all income groups. About 25% of respondents earning less than $49,999 anticipate gifting others clothing, footwear and accessories, followed by 23% of people bringing home between $50,000-$99,999/year.
People earning $200,000 and above (9%) and those earning between $100,000-$199,999 (8%) still say they wish to buy jewelry and watches as gifts.
People in America say they spend the lion’s share of their gift budget on their children
When it comes to gifting others, about 1 in 3 people (29%) declare they want to spend most on their children for the holidays. About 18% of people in the US claim they spend most of their gift budget on their significant other. About 15% of Americans say they intend to spend the most on gifts for other child family members or other adult family members.
Co-workers and other people are the social groups that are projected to receive the least gifts, as only 3% of people declare they intend on spending the most on these social categories.
More men than women claim to make the second-highest gift expense on their significant other
Both women and men claim to prioritize their children when it comes to spending the most for the holidays, with slightly more women (31%) than men (27%) expressing their intent to do so.
Spending the most on their significant other comes second to men (25%), while for women it’s divided equally between other child family members (16%) and other adult family members (16%) that are second when it comes to the budget allocated for holiday spending.
Well-to-do and young people are more likely to spend more on family non-gifts and household purchases
About half of Americans say they’re planning on spending less than $299 on non-gifts for family and household purchases this holiday season. Almost one in four people say they’re looking to spend between $300-$499 this holiday on household and family expenses that exclude gifts. Only 2% of people say they intend to spend between $1,000-$1,499 and 5% say they plan on spending over $2,000 for the same type of expense.
Among Americans bringing home more than $200,000, spending over $2,000 can be attributed to 28% of them. About 32% of people earning between $100,000-$199,999 anticipate spending less than $299, while those with an even slimmer paycheck — of $49,999 or less per year — declare in even higher proportions (65%) that they intend to allocate less than $299 for household and family-related expenses that don’t involve gifts.
Whether we’re looking at spending estimations for women or men or even for people of all ages, spending less than $299 on household purchases and for non-gifts for the family is the most common budget. Splurging is kept to a minimum this year, with only 7% of younger people (aged 18-34) claiming to spend over $2,000 on household and non-gift items for the family this holiday.
A crushing majority of people want to drop Secret Santa in 2020
Those who aren’t fans of the Secret Santa gift exchange can heave a sigh of relief this year as most Americans (69%) claim they do not intend to buy a Secret Santa gift for their co-workers. About 16% are undecided on the subject. Only 15% of respondents declare they would like to get involved in this workplace tradition of present swapping.
A fraction of the wealthy say they want to hold on to Secret Santa in 2020
Among those saying “yes” to Secret Santa, Americans earning $200,000 or more per year are the most enthusiastic supporters of the Secret Santa gifting tradition, with 23% of them saying they’d like to partake in this workplace activity. About 18% of both those with a paycheck between $100,000-$199,999/year and of those earning $50,000-$99,999/year also say they wish to join the Secret Santa fun.
Holidays activities budget: Americans project spending the most on spending time at home with friends and family
As Americans have been staying put for the past few months, spending time with family and friends at home seems to be the most anticipated activity this holiday season, as 52% of people say they plan to do that. About 30% of respondents cite dining out as an activity they plan to do during the holidays.
Spending time at a resort or a hotel has dropped significantly among people’s choice for the holidays, with only 11% of people saying they plan to do these types of activities. Even fewer people in the US anticipate traveling or going on vacation — a massive change compared to last year when reports indicated that no less than 71% of Americans wished to travel for the holidays in 2019.
Monthly income set to be the favorite payment method for the 2020 holidays
Almost half of the people in America say they plan on using their monthly income to cover the cost of holiday shopping this year. About 1 in 4 people (25%) anticipate using their savings for this purpose. Credit card users amount to about 13% of respondents this holiday season.
People over 55 (12%) are the most cautious about using credit cards for their holiday shopping, closely followed by people aged 18-34 (13%) who share a similar reluctance to using this payment method for the 2020 holiday season. About 14% of those with ages between 35-54 say they intend to use their credit cards to cover the cost of their holiday shopping.
Shopping both online and in-store are estimated to win Americans’ hearts and wallets
A large majority of people (61%) report that they intend to shop both online and in-store this holiday season. About 24% of people claim they want to do their shopping exclusively online. Shopping in-store only appeals to a much smaller share of respondents (15%).
People in the higher income tiers are also the least likely to shop in-store, with 6% of Americans in the $100,000-$199,999 annual income bracket claiming to go to stores to purchase holiday-related items, followed by 8% of people with a yearly paycheck that’s $200,000 or larger.
In-store shopping is the least popular option among all age groups, with only 10% of people aged 18-34 declaring to go that route.
Shopping online is reported to gain momentum with most people
Are people planning on changing their shopping habits for this holiday season given the current pandemic context? Almost 2 in 5 people (37%) anticipate shopping online this holiday season more than they did before. About 27% of people declare they intend to shop as usual, while 15% claim they choose their physical shopping destinations based on health-related measures. Only 5% of our respondents say they have been considering other brands than those ones they usually shop for.
What the experts are saying
Kristy L. Archuleta, Professor of Financial Planning, Housing and Consumer Economics, University of Georgia 
How do you think holiday spending habits will evolve this year?
I think we will see less spending this year given that there will be fewer family gatherings due to the widespread illness so this means less spending on gift-giving, food, and travel.
Do you think 2020 will see a change in how Americans cover their holiday expenses?
For many families who save for the holidays, their savings might already have been depleted due to needing the savings to pay for living expenses. We may see an uptick in credit card usage or agreeing as a family/friend group to not buy each other gifts this year. Consumers are likely going to find creative ways to cover their expenses or be savvy in what they do to celebrate the holidays this year.
Which shopping niche will attract more spenders this year?
I do think we will continue to see an increase in online shopping. My hope is that we see consumers shop at their locally owned stores to support their friends, family, and neighbors and their local economies.
James D. Philpot, Director of the Financial Planning Program at the Missouri State University
How do you think holiday spending habits will evolve this year?
I think we have already seen a lot of the spending evolution in response to the pandemic, with no strong reason to expect a big change in the next few months. That is, we will see many fewer consumers physically in the stores. Online shopping/delivery and order/pickup will continue to grow. Total spending may be off this year due to our position in an economic recovery rather than the strong economy we saw a year or so ago.
Do you think 2020 will see a change in how Americans cover their holiday expenses?
Consumers will increase their use of credit cards, for several reasons. Technological advances like tap-pay are making purchasing even easier than chip-reading. Of course, the increased online and order/pickup activity will require electronic payment. Some retailers (unnecessarily, in my opinion) are accepting only electronic payments for in-store purchases. Finally, many people will continue to lean on credit cards as a short-term borrowing source, paying off the holidays in the spring.
Which shopping niche will attract more spenders this year?
Again, with the pandemic, we have already seen a big shift in consumer purchasing toward house goods (from major appliances to small gadgets) and general home improvement items (lawnmowers, grills, etc.) with no reason to expect a major change. With changing travel restrictions and habits, many people will continue to substitute for camping/glamping equipment and will make improvements and upgrades to their vehicles.
Charles Aaron Lawry, Assistant Professor in the Division of Consumer Science, Purdue University
How do you think holiday spending habits will evolve this year?
Tech-savvy and younger shoppers have readily adopted e-commerce, on-demand shopping apps, and curbside pickup services. These smart shoppers will continue to use omnichannel services during the hectic holiday season to skip checkout lines and have large purchase orders delivered to their homes. However, a sizable number of traditional holiday shoppers believe that physical stores offer the best deals and markdowns during the holidays. While they may shop online to restock their pantries and buy consumables in bulk, these holiday loyalists cannot help but indulge themselves in the allure and ritual of hunting for gifts at bricks-and-mortar locations.
Do you think 2020 will see a change in how Americans cover their holiday expenses?
Since the emergence of the global pandemic, marketing analysts have noted that American consumers notably increased their spending on groceries and consumables. Therefore, middle-class Americans will be dipping into credit and using loans to offset this overspending and cover their holiday expenses. People are craving social and emotional connections due to social distancing and lockdowns, and the primordial act of exchanging gifts will help many people supplant those psychosocial needs.
Priya Raghubir, Professor of Marketing, New York University, Leonard N. Stern School of Business
How do you think holiday spending habits will evolve this year?
First, we will not have the Black Friday/ Cyber Monday spike as we have gotten accustomed to seeing due to longer time periods for Holiday sales and due to Covid19 concerns. It will be flatter.
Two, a shift towards internet shopping as people have got more used to it over the past many months, and because they want to avoid crowds and long lines.
Three, a move towards “home” and “nesting” in gifts — both for self and others as we all spend more time at home. This could include kitchen gadgets, home decor (pillows/ throws), and others.
Four, for children, an increase in classic games and puzzles that take time — jigsaws, monopoly, chess, Lego construction sets as parents look to occupy their children’s time in productive and educational ways.
Do you think 2020 will see a change in how Americans cover their holiday expenses?
For those of us who are fortunate to still have jobs, 2020 has seen an increase in discretionary income as we dine out less and spend less on entertainment. For those of us fortunate to be in this category, there will be little change.
For the rest of us who have had incomes affected and lost jobs, I think holiday spending will be curtailed and there will be an increase in “layaways” and “installment payment options” that are chosen, and possibly a move towards credit.
Methodology:
The survey was conducted on two online real estate platforms, rentcafe.com and point2homes.com, for a period of one month.
The sampling was designed as a non-probability sample, and the platforms’ active users voluntarily engaged in taking the survey. About 2,300 valid questionnaire results were interpreted for this study.
The average holiday expenditure was computed as a weighted average of the expenditure interval midpoints, with the weights represented by the percentage of responders.
For some visuals, the percentages may not always appear to add up to 100% due to rounding.
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