Prosper Insights | Retailers Beware - US Consumers Changing Their Holiday Spending Plans

(20 October 2020)  Despite unprecedented government stimulus packages in the wake of COVID-19, the latest data shows that consumer demand remains subdued and is unlikely to return to pre-crisis levels ahead of the winter holiday season. "Consumers are taking advantage of a variety of offerings from retailers this holiday season including earlier sales promotions and shipping options,” Prosper Executive Vice President of Strategy Phil Rist said. “Consumers are focusing on making the holidays special for others but are playing it by ear when it comes to those ‘extra’ items they might get for themselves.”

• The percentage of respondents that planned as of October to celebrate winter holidays in general decreased 4.1 p.p. from last year to 87.4 percent, which is a record low since 2007 when Prosper began collecting this data.
• While the average consumer's spending on holiday gifts for their family will be relatively unchanged from last year ($468), at constant 2007 dollars, that's actually 2.6 percent less than the 2009 winter holiday season, when the United States was coming out of the global financial crisis.
• The share of spending in the '$100 or less' bracket will increase by about 2 percent, displacing spending in the '$100-$500' bracket.
• On average a record 60 percent of all holiday shopping will be done online, a growth of 8 p.p. from the last year. The share of consumers who intend to do 100% of their shopping online also is on the rise, expected to increase to 8% in 2020 compared to 3.6 percent in 2019.
• Gift cards remain the most desired gift, according to respondents, although more people compared to last year said they would like to receive home decor and improvements items.