The insight: Gen Z consumers are 44% more likely to increase their spending this holiday season when compared with millennials, Gen Xers, and Baby Boomers, per new research by First Insight shared exclusively with Insider Intelligence.
- Thirty-six percent of Gen Zs plan to spend more this year, compared with 31% of millennials, 21% of Gen Xers, and 16% of Baby Boomers.
The big picture: While Gen Zs may be more willing to splurge than any other generation, holiday spending as a whole is set to be fairly robust this year even as price concerns remain top of mind.
- Four in five (81%) of consumers plan to spend as much as or more than last year on their holiday purchases, although fewer people are in the market for luxury goods, toys, and electronics.
- The focus on price should give value-oriented players, including big-box retailers like Walmart and Target, as well as discounters a boost this quarter. Nearly six in 10 consumers (58%) say they prefer to do their holiday shopping at big-box stores, while 47% opt for ecommerce marketplaces and 34% favor discount retailers.
Looking ahead: With consumers exhibiting more conservative purchasing behavior, retailers should lean on a variety of tactics—including but not limited to promotions—to drive sales.
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Consider rolling back (or pausing) return fees and extending return windows. Three-quarters of shoppers will think twice about shopping at retailers that charge for returns, and the same proportion expect a return policy between 30 and 60 days.
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Expand gift card options. Around three in four (72%) shoppers plan to purchase gift cards this year, and much of that demand is being driven by Gen Z.