U.S. retailers competing again with experiences during holidays
This holiday season, retailers are welcoming back in-store shoppers -- but they're facing renewed competition from activities such as theater shows and dining that weren't available a year ago.
A survey from Accenture shows that 43% of U.S. consumers plan to redirect spending away from goods and back into experiences and services. That percentage rises to 50% for shoppers who are in the Gen Z cohort, and 53% for younger millennials.
"It's absolutely going to take a hit to the product side because there's only so much disposable income," Jill Standish, senior managing director at Accenture and head of its retail industry group, said in an interview. "It'll be interesting to see what people end up spending on."
Overall, consumer spending for the Christmas holiday is expected to be strong, with some estimates for a sales increase ranging from 7% to 9% over last year. At the same time, experiences like dining out, vacations and attending theater shows were largely on hold last year. Since the introduction of covid-19 vaccines, restrictions have eased.
Larger numbers of shoppers are also preparing to go back into malls, according to a survey released on Tuesday from ICSC, an industry group that represents shopping centers. Half of U.S. consumers say that the holidays will encourage them to make more trips to physical stores -- a rise from 2020, when just 45% of shoppers said they planned to go to a mall during the vital holiday season.
Consumers may also opt for experiences as retailers contend with supply-chain woes that are threatening to limit merchandise supplies this year. One-third of consumers say they're worried about not getting what they need ahead of the holiday season, according to the Accenture survey.
In response, the retail industry has called on shoppers to buy presents earlier this year, and some promotions have started even in October.
The ICSC study was conducted from Sept. 24 to 26 and included 1,005 respondents. The Accenture survey, conducted in August, had 1,515 online participants.