The COVID-19 pandemic has affected the lives of millions, and its impact will trickle into how much, and where, consumers plan to spend this holiday season, according to Discover’s annual Holiday Shopping survey. The number of consumers who plan to curb spending almost doubled in one year, from 18% in 2019 to 35% in 2020. The survey also shows Generation Xers and millennials are the most likely to cut back their spending this year, 42% and 36%, respectively.
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Financial instability and disrupted social engagements are the top reasons consumers report shifting their budgets. Of those who plan to spend less:
- 37% attribute their decision to financial instability caused by COVID-19
- 32% attribute their decision to spend less on food and decorations due to a lack of holiday gatherings
- 28% attribute their decision to no longer needing to travel like they have in years past
“The pandemic has affected many aspects of life for nearly all consumers, and this holiday season will be no different,” said Meera Sridharan, vice president of rewards and product strategy at Discover. “As consumers navigate holiday spending decisions, we’re here to help them get the most for their money. The Discover it® Cash Back card, for example, has a rotating rewards calendar that complements consumers’ shifting spending throughout the year, and given the acceleration in online shopping, we are featuring top ecommerce retailers for this holiday season.”
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As consumers change their holiday plans, they are also changing where they are shopping. In light of COVID-19, 74% of consumers will be shopping online more, and 61% said they will participate more in online shopping holidays such as Cyber Monday, Discover’s survey shows.
A strong majority of younger consumers also plan to support small businesses. Seventy-seven percent of Gen Z and 70% of millennials said they would be shopping more frequently at small businesses this year compared to 61% of Gen X and 49% of boomers. In addition, younger generations plan to get a head start on their holiday shopping. Seventy-seven percent of Gen Zers and 71% of millennials reported they would start shopping earlier this year, compared to 60% of Gen X and 42% of boomers.
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