How US consumers plan to shop this holiday season - Klaviyo
2026-03-10 19:02 Diff
https://www.klaviyo.com/marketing-resources/ecommerce-trends-consumer-spending

Consumer shopping survey

How US consumers plan to shop this holiday season: inflation, budgets, and demographic differences

Inflation is hitting consumers hard, according to new research—but not hard enough to make most of them tighten their spending this holiday season.

Get the executive summary on how US consumers plan to shop amidst inflation

Inflation is hitting consumers hard, according to new research—but not hard enough to make most of them tighten their spending this holiday season.

Based on responses from 3.5K consumers in the US and Canada, a new survey from Klaviyo and Qualtrics finds that 65% of consumers plan to spend either the same amount or more on 2022 holiday gifts compared to last year.

Across demographic lines, 99% of consumers are aware that inflation is affecting the cost of goods and services, and 67% say it’s already affecting their purchasing decisions. Economic headwinds are forcing the vast majority of consumers to spend more on utilities, transportation, and food, beverage, and groceries compared to last year (73%, 67%, and 61%, respectively).

To offset these costs, most consumers are spending less on discretionary purchases in sectors like hobbies (29%), out-of-home entertainment (28%), apparel and accessories (28%), jewelry and watches (27%), and home decor (27%).

Only 2% of respondents say inflation will not have a strong impact on their spending plans—which means that by Black Friday Cyber Monday 2022, inflation will impact how more than 90% of consumers spend their money.

But all hope isn’t lost for retail. According to the research, consumers still plan to spend—a lot—over the holidays.

Different demographics are picking and choosing their discretionary spending more carefully, making ends meet by increasing budgets for some categories and decreasing them for others.

That means brands from ecommerce businesses to brick-and-mortar stores have space to increase ecommerce sales this holiday season—as long as they can get smarter about who, specifically, they’re targeting with which product categories.

The executive summary

As pandemic precautions thaw and budgets tighten under economic pressure, holiday shoppers will be on the lookout for creative ways to stretch a dollar at checkout. Online retailers willing to align with that cause by offering holiday discounts, bundled product packages, and free gifts will be more likely to earn consumers’ trust and loyalty—and their business.

Whether your target audience is scrappy college students, newlyweds, middle-income families, or affluent retirees, we’ve got the numbers on exactly how your prospects and customers plan to spend their money in the future—and what you can do to make sure they’re spending it with you.

Read on for the ecommerce marketing buyer personas that will help you hit your conversion rates this BFCM and beyond.

Survey demographics

Sample: 3.5K consumers

  • Location: US and Canada
  • Age: 18+
  • Responsible for budgeting and making purchasing decisions
  • At least 33% have children
  • Even distribution across income brackets

Younger generations more likely to increase gift spend this year

Across generational lines, most consumers will spend the same amount on holiday gifts this year as last.

But while the majority of those who plan to reduce their spend will do so by $500 or less, nearly 15% of all consumers plan to increase their holiday gift spend by $1K or more this year.

And millennials and Gen Z are far more likely than boomers and Gen X to increase their holiday gift spending in 2022.

In this section

  • How boomers will shop for the holiday season
  • How Gen X will shop for the holiday season
  • How millennials will shop for the holiday season
  • How Gen Z will shop for the holiday season

How boomers will shop for the holiday season

  • Who: survey respondents born between 1946-1964, during the post-World War II “baby boom”
  • What they’ll spend: The majority of boomers (55%) spend between $250-999 on holiday gifts each year, and for most (62%), that won’t change this year.
  • Of the 6% who plan on increasing their holiday spending, over a third (35%) of boomers will spend $250-499 more. Of the 32% who plan on reducing their holiday spending, 30% will spend $250-499 less.
  • Where they’ll spend it: Most boomers have fully embraced online shopping: 41% plan to split their holiday shopping 50/50 between online and in-person this year, and 30% plan to do 75% of it online. For most boomers (73%), this won’t be different from their shopping habits last year.
  • This year, boomers plan to increase their spending on discretionary purchases in sectors like hobbies (57%), fitness (50%), and jewelry (50%), but also in essential areas like health products (48%) and food, beverages, and groceries (45%).
  • Why: Inflation is affecting spending decisions for 66% of boomers and will affect future spending decisions for 20% of boomers, according to the survey. Besides the affluent (22%), boomers are the most likely demographic (14%) to say inflation is irrelevant to their current and future spending decisions.

How to convert more boomers this holiday season:

“You might be thinking, ‘OK boomer,’ but this is not a segment to ignore this holiday season,” says Bonnie Pecevich, director of product marketing at Pantastic. “That’s because boomers’ attitude towards spending is very similar to another valuable group—the affluent.”

“Not only did a similar proportion of boomers report that inflation won’t influence their spending, they’re also one of the few segments that plans to increase their spending more in non-essential areas—like hobbies, fitness, and jewelry—than in essential areas,” Pecevich points out. “As some of the younger demographics think about spending less in comparative areas, brands can ensure they have a successful holiday season by capturing sales from boomers.”

One key way to do this: serving a personalized shopping experience with relevant product recommendations.

“AI-powered product recommendations provide accurate recommendations by using data from a variety of criteria including, but not limited to, demographics, geography, customer spending behaviors, and product purchase behaviors,” Pecevich explains. “These can all work together to create compelling product recommendations like ‘most popular’ and ‘what’s new,’ and also serve opportunities to cross-sell, up-sell, and bundle. With personalization, you can identify a boomer who lives in Florida vs. Colorado and know what apparel and seasonal hobby items to show them.”

Considering a similar proportion of boomers plan to shop online this year as younger generations, “these investments into personalization don’t just serve certain segments,” Pecevich says. “They help you maximize your chances at converting every customer.”

How Gen X will shop for the holiday season

  • Who: survey respondents born between 1965-1980
  • What they’ll spend: Like boomers, the majority of Gen X (51%) spend between $250-999 on holiday gifts each year. But more of Gen X than any other generation plans to reduce their holiday shopping spend this year (38% vs. 32% of boomers, 29% of millennials, and 10% of Gen Z). Of the 38% who plan on reducing their holiday spending, 29% of Gen Xers will spend $250-499 less. Of the 9% who plan on increasing their holiday spending, 27% will spend $250-499 more.
  • Where they’ll spend it: True to form as the “middle child” generation between old-school boomers and digitally savvy millennials, 43% of Gen X plans to take a hybrid approach to their holiday shopping this year, splitting it 50/50 between online and in-person. 35% plan to do 75% of it online. For most Gen Xers (67%), this won’t be different from their shopping habits last year. This year, Gen X will spend more on essentials like health products (66%) and food, beverages, and groceries (64%), but also discretionary purchases in sectors like jewelry (56%), electronics (48%), and fitness (45%). Only 8% of Gen X plans to invest more in their hobbies—a significantly lower proportion than any other generation.
  • Why: Inflation is already affecting spending decisions for slightly more Gen Xers than boomers (73% vs. 66%, respectively) and will affect future spending decisions for 19% of Gen X, according to the survey. Fewer Gen Xers than boomers (8% vs. 14%) say inflation is irrelevant to their current and future spending decisions.

How to convert more of Gen X this holiday season:

“When promoting to Gen X this holiday season, the content you send needs to be relevant, timely, and valuable,” says Lindsay Potkewitz, partner marketing manager at Dynamic Yield. “Failing to connect with shoppers in a quick and meaningful way could mean losing their loyalty.”

Potkewitz points out that 62% of Gen Xers want to receive personalized recommendations and enjoy a shopping experience that is customized to them.

To maintain customer loyalty, then, Potkewitz advises brands to “leverage behavioral and affinity data to ensure they’re showing messaging, content, promotions and recommendations that speak directly to their users’ interests.”

How millennials will shop for the holiday season

  • Who: survey respondents born between 1981-1996
  • What they’ll spend: Like boomers and Gen X, the majority of millennials (51%) spend between $250-999 on holiday gifts each year. But unlike boomers and Gen Xers, millennials are far more split on whether they’ll spend more (21%), the same (50%), or less (29%) this year. Of the 29% who plan on reducing their holiday spending, 28% will spend $250-499 less. Of the 21% who plan on increasing their holiday spending, 27% will spend $250-499 more.
  • Where they’ll spend it: Defying their reputations as digital natives and social media addicts, most millennials (40%) will also take a hybrid approach to their holiday shopping this year, splitting it 50/50 between online and in-person. Almost the same proportion (39%) plans to do 75% of it online. Millennials are tied with Gen Z at 2% for the least amount of any demographic that plans to do their holiday shopping 100% in person. For most millennials (61%), this won’t be different from their shopping habits last year. This year, millennials will spend more on essentials like health products (58%) and food, beverage, and groceries (49%), but also discretionary purchases in sectors like fitness (54%), jewelry (43%), and electronics (38%).
  • Why: Millennials seem to share the same perspective on inflation as their slightly older peers: Inflation is already affecting spending decisions for the same proportion of millennials as Gen Xers (73%) and will affect future spending decisions for 20%, according to the survey.Half as many millennials as boomers (7% vs. 14%) say inflation is irrelevant to their current and future spending decisions.

How to convert more millennials this holiday season:

According to Jen Brennan, director of digital marketing at Northern Commerce, millennials “are one of the most valuable audiences available to brands. Understanding their needs and what drives their purchase decisions is a critical component to Cyber Week success.”

Brennan says brands can encourage purchase conversions by catering to the unique shopping habits and preferences of millennials. As millennials continue to seek out experiences that prioritize pleasure over function, “there is increased search volume happening around travel and tourism, restaurants, apparel and accessories, as well as beauty and personal care,” Brennan points out. Meanwhile, “search volume is decreasing this season for subscriptions, home appliances, consumer electronics, home decor, and food and groceries.”

With this in mind, “brands should consider how to add value and trust-building into their marketing efforts this holiday shopping season,” Brennan advises. “Increasing the perceived (or actual) value and risk associated with purchases and focusing on the experience your brand delivers can significantly reduce millennial hesitation.”

Brennan also recommends implementing easy and transparent return policies, free shipping offers, and interest-free payments through services like Afterpay and Klarna—all of which “can make a big difference in capturing conversions amid rising inflation costs and don’t require steeper discounts to products and services.”

Understanding the customer journey of your millennial shoppers is equally important, says Brennan, who encourages brands to take the time to collect data and analyze insights in order to tailor touchpoints to millennial preferences.

“Consider how you can reduce friction in their path to purchase by focusing marketing resources on cross-channel experiences,” Brennan suggests. “Think social media, SMS, email, and web—common channels millennials use to inform their purchasing decisions.”

“By evaluating their customer journey, you may find your millennial shoppers are turning to new channels, such as SMS and TikTok, more than they have before,” Brennan points out. “This creates an opportunity for brands to personalize the shopping experience for millennial consumers based on their needs and preferences.”

Millennials, Brennan says, are positioned to “make or break your success” this quarter. “With their high purchasing power,” she explains, “it’s important to both understand and cater to millennial shopping habits in order to increase your revenue and develop customer lifetime value from this important audience.”

How Gen Z will shop for the holiday season

  • Who: survey respondents born between 1997-2012
  • What they’ll spend: Like every other generation, the majority of Gen Z (51%) spends between $250-999 on holiday gifts each year. Considering these folks are earlier in their careers, it makes sense that a greater proportion (18%) only spends $100-249. But surprisingly, more Gen Zs than any other generation (31%, compared to only 6% of boomers, 9% of Gen X, and 21% of millennials) plan to increase their holiday shopping spend this year. The majority (59%) plan to spend the same, and 10% plan to spend less. Notably, of the 10% who plan on reducing their holiday spending, 43% of Gen Z will spend $50-199 less—a lower reduction than the most common choice in other generations. Of the 31% who plan on increasing their holiday spending, 31% will spend $200-249 more. That’s also a lower proportional change than the most common choice of the other generations—but a shocking 17% of Gen Z plans to spend $1K+ more.
  • Where they’ll spend it: Although Gen Z has a reputation for devoting serious time and energy to social media platforms like TikTok, members of this generational cohort are still most likely to split their holiday shopping 50/50 between online and in-person (45%). However, a greater proportion of Gen Z plans to do all their holiday shopping online than any other generation (15% vs. 12% of millennials, 10% of boomers, and 9% of Gen X), and Gen Z is tied with millennials at 2% for the least amount of any demographic that plans to do their holiday shopping 100% in person. This year, Gen Zs will spend more on essentials like health products (67%) and food, beverage, and groceries (55%), but they also plan to invest heavily in their hobbies (67%), electronics (50%), and home decor (38%). Only 33% of Gen Z plans to spend more money on fitness this year—a lower proportion than any other generation.
  • Why: Interestingly, Gen Z’s current take on inflation seems to mirror boomers’ more closely than any other generation: Inflation is already affecting spending decisions for about the same proportion of Gen Z as boomers (68% vs. 66%). Like millennials, though, far fewer Gen Zs than boomers say inflation is irrelevant to their current and future spending decisions (7% vs. 14%). In fact, the youngest employees in the workforce are, perhaps understandably, the most concerned about the impact of a tough economy on their futures. More Gen Zs than any other generation (25% vs. 20% of boomers, 19% of Gen Xers, and 20% of millennials) say inflation will affect their future spending decisions.

How to convert more of Gen Z this holiday season:

“Gen Z is definitely a generation that puts their money where their mouth is,” says Morgan Mulloy, associate director of retention marketing at Avex. “They are one of the most outspoken generations about social and moral issues and they keep that in mind when investing their money into products.”

With this in mind, “brands should be more vulnerable when explaining the ‘Why?’ behind their brand,” Mulloy advises. “If Gen Z is a brand’s target market, deliberately showing the brand’s mission and giving customers a reason to invest in your product is more essential than ever.”

Relationship status differences

Relationship status has little bearing on holiday shopping habits

Single people are ready to get out of the house, according to the research: This year, 69% plan to spend less money on in-home entertainment, while 56% plan to spend more on out-of-home entertainment.

Those in relationships or marriages, by contrast, plan to decrease their spending in both in-home and out-of-home entertainment (66% and 67%, respectively).

Beyond that, and a few differences when it comes to plans for spending discretionary income, relationship status appears to have little bearing on the purchase decisions people make during the holidays.

In this section

  • How partnered folks will shop for the holiday season
  • How single folks will shop for the holiday season

How partnered folks will shop for the holiday season

  • Who: survey respondents who self-described as in a relationship or married
  • What they’ll spend: The majority of people in relationships (51%) spend between $250-999 on holiday gifts each year. About half (56%) of couples plan to spend the same amount this year, while 32% plan to spend less. Of the 32% who plan on reducing their holiday spending, 29% will spend $250-499 less. Of the 12% who plan on increasing their holiday spending, 31% will spend $250-499 more.
  • Where they’ll spend it: Most couples (41%) will take a hybrid approach to their holiday shopping this year, splitting it 50/50 between online and in-person. 36% plan to do 75% of it online. For most couples (67%), this won’t be different from their shopping habits last year. This year, those in relationships will spend more on essentials like health products (56%) and food, beverage, and groceries (55%), but also discretionary purchases in sectors like jewelry (56%, compared to only 20% of single people), fitness (47%), and electronics (42%).
  • Why: Inflation is already affecting spending decisions for 72% of couples and will affect future spending decisions for 19%, according to the survey. Only 9% of those in relationships say inflation is irrelevant to their current and future spending decisions.

How to convert more couples this holiday season:

“This year, like every year, thousands of partners will be searching for the perfect present for their loved one,” says Jen Brennan, director of digital marketing at Northern Commerce. “Choosing a gift is often easier said than done, so let’s make sure that the path to purchase is seamless for your coupled-up customers.”

When shopping for a significant other, some of the most common questions people face include “Will it fit?” and “What if they don’t like it?” “While the easiest answer would be to encourage couples to outright ask their partner, that removes the surprise and delight of the holidays,” Brennan points out.

How can your brand help? Brennan recommends the following:

  • Offer holiday or virtual fit guides to help gift buyers with their purchase decision, “including popular products, social proof through reviews and user-generated content, and other conversion-assisting prompts, such as special coupon offers or incentives for the holiday shopping season,” Brennan advises.
  • Add a gift card option to your ecommerce storefront for the “pickier or more indecisive shoppers, especially those buying for their especially particular partner,” Brennan suggests. “Gift cards can be a great way to create a repeat site or in-store visitors and create a personalized shopping experience for the gift recipient—your ultimately ideal customer and subscriber.”
  • Develop an online wishlist tailored to shareable content that gift recipients can send to their partner or someone close to them “with a gentle nudge for holiday buying inspiration,” Brennan recommends. “Even social sharing icons can be a quick and easy way to capture shopping lists, including Pinterest, which is a popular planning tool for many online shoppers.”

If your business isn’t able to offer these solutions, “ensure that you’re able to offer an easy and free return policy for added assurance for consumers,” Brennan advises. “We’ve all made gifting mistakes. Allow your customers to make their purchase with confidence.”

How single folks will shop for the holiday season

  • Who: survey respondents who self-described as single, divorced, or widowed
  • What they’ll spend: Like couples, the majority of single people (55%) spend between $250-999 on holiday gifts each year, although slightly less (13% vs. 17%) spend $1K-1.5K. Most single people (57%) plan to spend about the same amount on holiday shopping this year as last year. Of the 27% who plan on reducing their holiday spending, 26% will spend $250-499 less. Of the 16% who plan on increasing their holiday spending, 30% will spend $200-249 more—a lower increase than the most common choice for couples.
  • Where they’ll spend it: Relationship status seems to have little to no bearing on how people approach their holiday shopping. The same proportion of single people as couples (41%) take a hybrid approach to their holiday shopping this year, splitting it 50/50 between online and in-person. 29% plan to do 75% of it online. For most single people (67%), this won’t be different from their shopping habits last year. Like couples, single people will spend more on essentials like health products (67%) and food, beverage, and groceries (49%) this year, as well as discretionary purchases in sectors like fitness (54%) and electronics (33%). But unlike couples, they also plan to invest more in their hobbies (50%, compared to only 26% of couples).
  • Why: Relationship status doesn’t appear to have an impact on people’s perspective on the economy, either. Inflation is already affecting spending decisions for slightly fewer single people than couples (66% vs. 72%). Slightly more single people believe it will affect their future spending decisions than couples (23% vs. 19%). Only 11% of people who aren’t in a relationship say inflation is irrelevant to their current and future spending decisions.

How to convert more singles this holiday season:

“Every merchant, product and customer is different—one size doesn’t fit all,” says Roee Stimler, head of partnerships at Rise.ai. “Those 27% of singles who plan on reducing holiday spending will appreciate brands who engage with them in a personalized fashion and give them value beyond the holidays.”

How? “Leveraging loyalty programs can help turn those singles making a one-time purchase from your brand during the holidays into lifetime customers,” Stimler suggests. “So, even though the economic climate may lead some singles to purchase less during the holiday season, by offering them store credit for making a purchase, for example, you can bring them back after the holidays—and their lifetime value to your business will actually increase.”

In addition, “utilizing automations that offer the right reward or message to buyers in the singles category, at the right time, can ensure a seamless experience that wastes no opportunity to increase AOV.”

Ultimately, “tying your loyalty program together with gift cards, returns, referrals and store credit—in one holistic, omnichannel solution for customer engagement, such as Rise.ai—can help optimize your ability to convert singles into loyal customers, even in challenging economic times,” Stimler says.

Another way to convert more single folks this holiday season: give them permission to treat themselves. “If you have single customers, a great way to extend your holiday promotion is to reposition your holiday promo as a gift for you and a gift for them,” suggests Jeremy Horowitz, partner marketing team lead at Gorgias.

In other words, first send an email or text that focuses on buying a gift for friends and family, and follow it up with a second message that encourages a “treat yourself” gift.

“It’s a great way to get more miles out of your current promotion and convince customers that love you to buy more,” Horowitz points out. “If you want to go the extra mile, you can create gift guides around each: gifts for them, and gifts for me.”

Parental status differences

Kids and holiday shopping: parents more likely to be big spenders

Like single people, people without kids are ready to get out of the house: While 75% of non-parents are decreasing their spend on in-house entertainment, 53% are increasing their spend on out-of-home entertainment.

Parents, on the other hand, are reducing their spend on both in-house entertainment (59%) and out-of-home entertainment (70%).

As in years past, parents are more likely than both non-parents and most other demographics to spend more than $1K on gifts during the holiday season.

In this section

  • How parents will shop for the holiday season
  • How non-parents will shop for the holiday season

How parents will shop for the holiday season

  • Who: survey respondents with children under the age of 18 living in their households
  • What they’ll spend: While exactly half of parents, like many other demographics, spend $250-999 on holiday gifts each year, a significant portion of them (40%) spend over $1K—more than any other demographic in our survey, besides those with household incomes above $100K. And parents are fairly split about whether they’ll change their spending habits this holiday season. About half (51%) say they’ll spend the same amount, but 32% plan on spending less, and 17% plan on spending more. Of the 32% who plan on reducing their holiday spending, 28% will spend $250-499 less. Of the 17% who plan on increasing their holiday spending, 30% will spend $250-499 more.
  • Where they’ll spend it: Most parents (42%) will take a hybrid approach to their holiday shopping this year, splitting it 50/50 between online and in-person. 38% plan to do 75% of it online, and only 3% plan to do 100% of it in person. For most parents (63%), this won’t be different from their shopping habits last year. Parents will spend more on essentials like food, beverage, and groceries (58%) and health products (57%) this year, as well as discretionary purchases in sectors like fitness (52%), jewelry (50%, compared to only 25% of non-parents), and electronics (48%, compared to only 24% of non-parents).
  • Why: Inflation is already affecting spending decisions for 74% of parents—more than any other demographic group in our survey, besides those with a household income <$75K (76%). (Those with a household income between $75K-100K, Gen X, and millennials are a close third at 73%.) 19% of parents expect inflation to affect their future spending decisions, and only 7% of parents say inflation is irrelevant to their current and future spending decisions.

How to convert more parents this holiday season:

“Lean into the data with parent shoppers,” suggests Vanessa Petersen, content at WooCommerce. “Based on conversations in online parenting communities, this demographic has become increasingly selective about the products that enter into their childrens’ everyday lives. Reviews, validation, and social proof are key for building top-selling products this holiday season.”

Social listening, Petersen says, can provide “valuable insight into what parents care about, which products are most popular (or unpopular), and which stories and marketing are resonating best. You can also use your own data to make marketing decisions. Look at past purchases for children and target previous buyers with items for slightly older kids. Tag products’ meta data by age group, so that you can cross-sell related gifts.”

Finally, “appreciate parents for how busy they are during the holidays. Make their gift-buying simple,” Petersen advises. “Show and encourage reviews on product listings, up-sell with gift-wrapping options, curate sets of gifts based on age and interest, and offer opt-in to re-stock alerts and pre-orders. Let parents know that you have their interests and needs in mind.”

How non-parents will shop for the holiday season

  • Who: survey respondents with no children under the age of 18 living in their households
  • What they’ll spend: Like parents, most non-parents (55%) spend between $250-999 on holiday gifts each year. Most (59%) plan to spend about the same amount on holiday shopping this year as last year. While the same proportion of non-parents as parents (33% and 32%, respectively) plan to spend less this year, far fewer non-parents than parents (8% vs. 17%) plan to spend more. Of the 33% of non-parents who plan on reducing their holiday spending, 28% will spend $250-499 less. Of the 8% who plan on increasing their holiday spending, 24% will spend $250-499 more.
  • Where they’ll spend it: Parental status seems to have little to no bearing on how people approach their holiday shopping. 40% of non-parents (compared to 42% of parents) will take a hybrid approach to their holiday shopping this year, splitting it 50/50 between online and in-person, and 31% plan to do 75% of it online. For most non-parents (70%), this won’t be different from their shopping habits last year. Like parents, non-parents will spend more on essentials like health products (60%) and food, beverage, and groceries (52%) this year, as well as discretionary purchases in sectors like fitness (54%) and beauty products (33%). Compared to parents, non-parents appear less likely to increase their spending in categories like jewelry (25%, compared to 50% of parents), electronics (24%, compared to 48% of parents), and home decor (19%, compared to 39% of parents).
  • Why: Inflation is already affecting spending decisions for 68% of non-parents, and 20% of them believe it will affect their future spending decisions. Nearly twice as many non-parents as parents (12% vs. 7%), however, say inflation is irrelevant to their current and future spending decisions.

How to convert more non-parents this holiday season:

“As the holiday season approaches, people without kids are looking to maximize their free time and explore new experiences together,” says Leya Leydiker, director of technology partnerships at Recharge.

With that in mind, “subscriptions can not only help make their lives easier by keeping their homes stocked with the daily consumables they need—like meal kits, beauty and grooming supplies, and paper goods—but also, brands that allow for flexible subscriptions will enable these customers to keep a sense of spontaneity in their lives.”

“Online merchants can leverage these insights to build their community and launch campaigns that include things like exclusive access to new products or partnerships with like-minded brands that model the full target consumer experience,” Leydiker adds.

Income and holiday shopping: make more, spend more

Predictably, the more money people make, the more they spend on holiday shopping—and the less likely they are to be concerned about the impact of inflation.

While the majority of demographics spend $250-999 on holiday shopping each year, those who make over $100K are much more likely to invest over $1K in gifts during the holiday season.

Income correlates less predictably, however, with the retail sectors where different consumers plan to increase their spending this year.

In this section

  • How people with household incomes <$75K will shop for the holiday season
  • How people with household incomes $75K-100K will shop for the holiday season
  • How people with household incomes $100K-150K will shop for the holiday season
  • How people with household incomes $150K-200K will shop for the holiday season
  • How people with household incomes $200K-500K will shop for the holiday season

How people with household incomes

  • Who: survey respondents with an annual household income <$75K
  • What they’ll spend: The majority of people with household incomes <$75K (60%) spend between $250-999 on holiday gifts each year. About half (53%) plan to spend the same amount this year, while 35% plan to spend less. Of the 35% who plan on reducing their holiday spending, 31% will spend $50-199 less—a lower reduction than the most common choice in higher income brackets. And of the 12% who plan on increasing their holiday spending, 30% will only spend $50-199 more—a lower increase than the most common choice in higher income brackets.
  • Where they’ll spend it: Similar to most other demographics, 43% of people with household incomes <$75K will take a hybrid approach to their holiday shopping this year, splitting it 50/50 between online and in-person. 28% plan to do 75% of it online. For most (66%), this won’t be different from their shopping habits last year. This year, those with household incomes <$75K will spend more on essentials like health products (50%), but also discretionary purchases in sectors like electronics (70%, the most of any income bracket), fitness (60%), and hobbies (50%—more than double any other income bracket except $200K-500K, also 50%).
  • Why: Inflation is already affecting spending decisions for 76% of people with household incomes <$75K—more than any other demographic group in our survey. (Parents are a close second at 74%.) 18% of people with household incomes <$75K expect inflation to affect their future spending decisions, and only 6% say inflation is irrelevant to their current and future spending decisions—the lowest amount of any demographic in our survey.

How to convert more of this income bracket this holiday season:

“Provide early access to sale opportunities to convert them online before they decide to head out for in-person shopping,” suggests Emily Roberts, VP of Retention Marketing at Roswell NYC. “Keep practicality and value top of mind, and increase AOV with ‘buy more get more’ offers and bundles.”

How people with household incomes $75K-100K will shop for the holiday season

  • Who: survey respondents with an annual household income between $75K-100K
  • What they’ll spend: The majority of people with household incomes between $75K-100K (58%) spend between $250-999 on holiday gifts each year. About half (57%) plan to spend the same amount this year, while 32% plan to spend less. Of the 32% who plan on reducing their holiday spending, 25% will spend $50-199 less and 25% will spend $200-249 less—both lower reductions than the most common choice in higher income brackets. And of the 11% who plan on increasing their holiday spending, 32% will spend $200-249 more—a lower increase than the most common choice in higher income brackets.
  • Where they’ll spend it: Most demographics are most likely to take a hybrid approach to their holiday shopping, splitting it 50/50 between online and in-person, and second most likely to do 75% of it online. For those with household incomes between $75K-100K, however, it’s more evenly split: 39% will take a hybrid approach to their holiday shopping this year, splitting it 50/50 between online and in-person, and 36% will do 75% of it online. For most (68%), this won’t be different from their shopping habits last year. This year, those with household incomes between $75K-100K will spend more on essentials like health products (63%) and food, beverage, and groceries (56%), but also discretionary purchases in sectors like fitness (63%), jewelry (50%), and home decor (45%). Only 18% of this income bracket plans to invest more in their hobbies, and only 25% plan to invest more in electronics.
  • Why: Inflation is already affecting spending decisions for 73% of people with household incomes between $75K-100K, and 18% of them believe it will affect their future spending decisions. Only 9% say inflation is irrelevant to their current and future spending decisions.

How to convert more of this income bracket this holiday season:

“Flexible payment options are going to be ever more important this holiday season, especially for those with lower household incomes who’ll be the most financially constrained,” says Eve Rouse, content marketing manager at Nosto. “Retailers offering such should make these options clear across their customer journey to show that desired purchases might actually be attainable for hesitant shoppers.”

How? Rouse recommends implementing pop-ups that are triggered upon exit intent to remind people of buy now pay later (BNPL) options. Merchants should also consider personalizing elements of their website toward shopper segments of returning customers who have previously relied on BNPL tools to pay.

“Assuming these shoppers are more cost-sensitive, it could be impactful to highlight other money-saving incentives that could differentiate you from your competition, such as free shipping, free delivery, and certain discounts you may be running,” says Rouse, who also suggests showing your most aggressive discounts first and foremost.

“When it comes to converting new traffic—of which you’ll see a lot during the holiday season—you’re going to want to create a strong landing experience that immediately puts your brand in a good light,” Rouse adds. “To this segment, you’re going to want to highlight your brand’s USPs on your homepage, and also build trust through approaches like giving detail on delivery times, for example.”

How people with household incomes $100K-150K will shop for the holiday season

  • Who: survey respondents with an annual household income between $100K-150K
  • What they’ll spend: Predictably, the more people make, the more they spend on holiday shopping. While most people with household incomes between $100K-150K (49%), like many other demographics, spend $250-999 on holiday gifts each year, a significant portion of them (41%) spend over $1K.  About half (54%) plan to spend the same amount this year, while 32% plan to spend less. Of the 32% who plan on reducing their holiday spending, 27% will spend $250-449 less. Of the 14% who plan on increasing their holiday spending, 33% will spend $250-499 more.
  • Where they’ll spend it: Similar to most other demographics, 42% of people with household incomes between $100K-150K will take a hybrid approach to their holiday shopping this year, splitting it 50/50 between online and in-person. 36% plan to do 75% of it online. For most (67%), this won’t be different from their shopping habits last year. This year, those with household incomes between $100K-150K will spend more on essentials like health products (60%) and food, beverage, and groceries (56%). But fewer proportions of this income bracket are likely to increase their discretionary spending: After food, beverage, and groceries, the next most common selections include electronics (just 37%), beauty products (just 36%), and fitness (just 35%).
  • Why: Inflation is already affecting spending decisions for 69% of people with household incomes between $100K-150K, and 21% of them believe it will affect their future spending decisions. 10% say inflation is irrelevant to their current and future spending decisions.

How to convert more of this income bracket this holiday season:

As Dan LeBlanc, CEO and co-founder of Daasity, points out, “higher household income does not necessarily mean higher discretionary income.”

“It’s crucial to consider where many of your customers are,” LeBlanc explains. “Households with a total gross income between $100K-150K will likely have more discretionary income in smaller cities and rural areas, but budgets will be tighter for customers in major cities. Some folks (particularly on the lower end of this range) may even be living paycheck to paycheck.”

If you’re a luxury brand, LeBlanc says, “you may generate relatively little revenue from this bracket to begin with, so holiday discounting will not make much of a difference. Your typical shoppers are likely less price-sensitive.”

But LeBlanc advises non-luxury brands, by contrast, to “consider who you are selling to, and discount accordingly. Do you sell more to families or individuals? Both? Families tend to have the least discretionary income in this bracket (consider, for example, families living in more expensive areas making closer to $100K), so they’re going to be bargain hunting early and often.”

Especially given this bracket’s preference for online shopping, LeBlanc recommends:

  • Informing customers of discounts starting in mid-October
  • Discounting early in November
  • Pulling back discounts until BFCM
  • Sending your best offers of the season at BFCM (+ free or discounted shipping)
  • Pulling back discounting again until closer to Christmas
  • Sending your next-best offers closer to Christmas (+ free or discounted shipping)

“This discount flow will preserve overall Q4 margin and increase the chances that customers repurchase,” LeBlanc explains.

Remember, too, that Christmas 2022 falls on a Sunday. “That means there’s a bit more time to ship products,” LeBlanc points out. “Customers may look to buy online as close to Christmas as possible with a delivery date still before Christmas Day. They’re looking to avoid the near-Christmas mall rush and to snag clearance sales and other deep discounts. Take advantage of that in your promotions.”

How people with household incomes $150K-200K will shop for the holiday season

  • Who: survey respondents with an annual household income between $150K-200K
  • What they’ll spend: Unlike most other demographics, who spend $250-999 on holiday gifts each year, most people with household incomes between $150K-200K (48%) spend $500-1499. About half (58%) plan to spend the same amount this year, while 28% plan to spend less. Of the 28% who plan on reducing their holiday spending, 32% will spend $250-449 less. Of the 14% who plan on increasing their holiday spending, 34% will spend $250-499 more.
  • Where they’ll spend it: People with household incomes between $150K-200K are the only demographic in or survey more likely to do 75% of their holiday shopping online (43%) than split it 50/50 between online and in-person (39%). For most (65%), this won’t be different from their shopping habits last year. This year, those with household incomes between $150K-200K will spend more on essentials like health products (80%, more than any other income bracket) and food, beverage, and groceries (73%, also more than any other income bracket). They’ll also increase their spend in discretionary purchases in sectors like fitness (71%, more than any other income bracket), electronics (67%, a close second to those with household incomes <$75K), and jewelry (50%). Only 25% of this income bracket plans to invest more in their hobbies and beauty products.
  • Why: Predictably, as income goes up, concerns about inflation start to decline. Still, inflation is already affecting spending decisions for 66% of people with household incomes between $150K-200K, and 22% of them believe it will affect their future spending decisions. 12% say inflation is irrelevant to their current and future spending decisions.

How to convert more of this income bracket this holiday season:

According to John Florey, CEO at SAMA Labs, “it will be crucial for most brands to make sure they are providing enough shopper deals and discounts, as the vast majority of consumers across all generations and income brackets have become hybrid shoppers who value both the convenience and reliability of online shopping while still depending on in person deals for last minute purchases.”

To do that, the agency suggests “running campaigns that ramp up to Black Friday. For many of our clients, we’re doing an email and SMS approach that alerts our subscriber lists to smaller deals leading up to or away from Black Friday with decreasing or increasing percentages off to create a sense of urgency. For example, some brands are running campaigns where two weeks before Black Friday, we offer a 10% off promo code. Then, the following week, we offer 20% off. Finally, the week of Black Friday, we offer 30% off.

We’re expecting to see a steady flux of conversions during these weeks as many consumers are looking to get an even better deal. That’s due in large part to the fact that consumers making between $150K-$250K value convenience more than anything else and are often willing to pay for that ease of shopping that online deals provide (this SMS marketing, too!).

Many brands are hesitant to be seen as a ‘discount’ or ‘deal’ brand, but the incentive doesn’t always have to be a percentage off—it can be something like free shipping or an extra gift with purchase. Consumers in this income bracket also want to make sure they’re getting great value in addition to the convenience, so we strongly suggest using messaging that highlights value. Consider offering freebies!

How people with household incomes $200K-500K will shop for the holiday season

  • Who: survey respondents with an annual household income between $200K-500K
  • What they’ll spend: Unlike most other demographics, who spend $250-999 on holiday gifts each year, people with household incomes between $200K-500K are more likely to spend either $500-999 or >$2,000 (25% in each category). 17% spend $1,000-1499, and another 17% spend $1,500-1,999—which means 84% of those with household incomes between $200-500K spend over $500 on holiday shopping each year. Besides boomers (62%), those in this income bracket are most likely out of all demographics to spend the same amount this year (63%). Of the 21% who plan on reducing their holiday spending, 36% will spend $250-449 less. Of the 16% who plan on increasing their holiday spending, 31% will spend >$1,000 more—a significantly higher increase than the most common choice in all other income brackets.
  • Where they’ll spend it: Similar to most other demographics, 44% of people with household incomes between $200K-500K will take a hybrid approach to their holiday shopping this year, splitting it 50/50 between online and in-person. 34% plan to do 75% of it online. For most (65%), this won’t be different from their shopping habits last year. This year, those with household incomes between $200-500K will spend more on food, beverage, and groceries (52%). But this income bracket is more likely to increase their discretionary spend in sectors like beauty products (56%), hobbies (50%), and home decor (50%) than in essentials like health products (only 20%—by far the lowest of any demographic in our survey). Only 12% of this income bracket, meanwhile, plans to invest more in electronics. Only 15% plans to invest more in fitness, and only 17% plans to invest more in apparel and accessories.
  • Why: Inflation is affecting spending decisions for 57% of people with household incomes between $200K-500K—the lowest proportion of any demographic in our survey. While 21% of those with household incomes between $200K-500K say inflation will affect their future spending decisions, this income bracket is the most likely demographic in our survey to say inflation is irrelevant to their current and future spending decisions (22%). That’s nearly double the amount of boomers at 14%, the next closest demographic, and nearly quadruple the amount of those with household incomes <$75K (6%).

How to convert more of this income bracket this holiday season:

“The common denominator for this audience is a desire for a seamless shopping experience and peace of mind,” says Samantha Santana, digital marketing strategist at Imagination Media.

Santana suggests achieving this by “incorporating a minimalist design, quality differentiation, and clear communication throughout the customer journey. Wow your subscribers through personalization, smart product recommendations, and a VIP experience.”

How to beat economic headwinds this BFCM—no matter your audience

Let’s recap: Across demographic lines, during the last few holiday seasons, 83% of consumers spent at least $250 on gifts, and 28% spent, on average, between $500-999. In response to inflation-related pressures, 35% of consumers will spend less money on holiday shopping in 2022 than in recent years past.

But over half (54%) of consumers plan to spend roughly the same amount of money on gifts this year—and 11% even plan on increasing their spending. More than a quarter of the latter group (26%) will spend $250-499 more.

And regardless of their budgets, shoppers will spend their money at both the cash register and online stores this year, according to the survey. For three-quarters of survey respondents and our online shopping stats, online purchases will comprise just 50-75% of their holiday shopping. Only 13%, meanwhile, plan to do their holiday shopping entirely online.

Today’s consumer is an omnichannel shopper—and while 5 years ago that might have meant shopping across 4-5 channels, today’s “customers want—and expect—to engage seamlessly across 10 or more” channels, according to McKinsey & Company.

Kunle Campbell, host of the 2X eCommerce Podcast and co-founder of Octillion Capital Partners, agrees that channel-hopping, with ease, is the key attribute of today’s omnichannel shopper.

“They are not fazed by switching between, say, a personalized offer on a retail website coupled with a push notification via their browser or app, followed by an email update prompting them to make a local in-store pick-up,” Campbell explains. “Once in-store, they may browse an interactive catalog to make further purchases.”

In other words, people shop all over the place, across myriad devices and channels—which means, first, that ecommerce stores can’t just be direct-to-consumer. You need retail partners, too. And second, it means both online shoppers and in-person shoppers expect a seamless omnichannel customer experience from you.

Are you delivering an omnichannel customer journey? Do you know how?

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