Retail
High-Income Shoppers to Drive 2017 Holiday Spending Up 6%
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U.S. consumers with annual household incomes greater than $60,000 are forecast to spend $1,507 on gifts, travel and entertainment this holiday season. Households with incomes below that threshold are forecast to spend $810.
On average, 83% of U.S. consumers are expected to spend $1,189, an amount equal to or more than they spent last year.
The data were reported Tuesday by PricewaterhousCoopers in the firm’s “2017 Holiday Outlook.” The report noted that rising employment, not higher pay, was responsible for household income rising to an average of just over $59,000 last year. But “high-income families have seen the largest income gains” and “most other consumers, while optimistic are coping with stagnant wages.”
Shopping online has been replacing store traffic on Black Friday for a few years now. and 2017 will continue the trend. Some 30% of Black Friday shoppers plan to shop only online and another 30% plan to split their Black Friday shopping between online and in-store. Only 19% plan to shop only in physical stores.
And as we’ve noted before, online shopping on Thanksgiving Day last year was up 11.5% to $1.93 billion, while store visits declined 1%. PricewaterhouseCoopers estimates that 28% of Thanksgiving Day shoppers this year will do most of the shopping only online, up 10% compared with last year. Another 17% will shop both online and in stores, while 13% will shop only in stores.
To no one’s surprise, low prices are the primary motivating factor (63%) for purchases. With sales beginning well in advance of Black Friday, 62% of U.S. consumers will begin shopping before Black Friday. To take advantage of all the sale pricing, however, 70% of consumers don’t plan to finish their holiday shopping until after Black Friday weekend.
Nearly as many consumers (84%) plan to shop online this year as plan to shop (88%) in brick-and-mortar stores. More than half say they will shop in smaller specialty or independent retail stores this year.
Here are some other interesting data points from the report:
- Consumers over 35 — from Gen Xers to boomers to the Greatest Generation — plan to spend more than 60% of their holiday budget on family. Millennials come in at 51%.
- While travel ranks high on millennials’ wish lists, Gen Xers and boomers are more likely to buy gifts of travel for themselves.
- Boomers and the Greatest Generation (aged 71+) will treat themselves to dining and entertainment options far more than other age groups.
- Meanwhile, 40% of young Gen Z (ages 13 to 16) will shop solely in stores.
- Consumers will spend close to 30% of their holiday budget on travel, slightly more than they did last year.
- Those who plan to travel will spend an average of $1,216 on travel alone, bringing their overall spending on gifts, travel and entertainment to $2,269, well above the $1,189 overall average for all consumers.
See the PricewaterhouseCoopers report for more details.
24/7 Wall St.
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