How has COVID-19 impacted holiday shopping plans?

Over the past three months, COVID-19 has created a uniquely challenging environment for retailers. Many have seen sales decline, making the upcoming holiday shopping season more critical than ever. Businesses seek to make up ground that was lost during much of Q2.

As brands start to set their plans for the holidays, Bizrate Insights surveyed consumers to investigate how COVID-19 has changed their shopping plans, and what retailers should be doing to prepare.

Shoppers expect their spending to be affected

While the holiday season is still several months away, early signs indicate that it may not provide retailers with the bump in sales they’re looking for. 34% of survey respondents expect COVID-19 to impact how much they spend on holiday gifts, either due to financial worries or because of health concerns. Another 25% said they weren’t sure, further highlighting the uncertainty that the coronavirus has created for many consumers.

Do you expect your holiday shopping to be impacted by COVID-19?

Source: Bizrate Insights Flash Survey, May 2020.

Overall, total spending will drop

The majority of respondents – 52% – indicated that they plan on spending the same amount as last year. However, only 4% of shoppers plan to spend more on holiday gifts than they spent the previous year. Far more look to be limiting their spending, with 21% responding that they’ll spend less on gifts than in 2019.

How much do you plan to spend on holiday gifts in 2020?

Source: Bizrate Insights Flash Survey, May 2020.

22% of the shoppers we surveyed still aren’t sure how their spending will compare to 2019, leaving a potential opportunity for growth.

Many consumers are changing up their gift lists

COVID-19 has inspired many consumers to make adjustments to their planned purchases. Many shoppers now plan to spend more on gift cards, with 15% pivoting to purchasing these instead of what they had originally planned. Another 9% are focused on buying essential items like groceries or healthcare products.

Has COVID-19 changed the types of items you plan to buy?

Source: Bizrate Insights Flash Survey, May 2020.

Just 50% of consumers say they don’t plan to change what gifts they buy, with another 23% unsure, consistent with our overall findings.

What retailers can do now

While it’s likely that COVID will have a major impact on holiday sales, Q4 is still several months away, and many consumers have yet to finalize their plans. Rather than hope for the best, retailers should prepare by promoting essential items they carry and selling gift cards to help offset an anticipated pullback in consumer spending.

The number of undecided consumers is likely to decrease as Q4 gets closer. Bizrate Insights is will report on any changes to keep retailers informed as the holiday season approach.

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