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The 2022 holiday shopping and travel report

Recalibrating celebrations in uncertain times
In 2022, the world shifted its focus—again.
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As vaccines began to make COVID outbreaks more manageable, a wider set of economic and political issues took center stage. Many individuals began to fear less for their physical safety—and worry more about their personal finances. New types of risk and uncertainty colored a year many had hoped would offer a return to normalcy.

A combination of disruption and financial strain has also diminished economic projections for the holiday season. In response, some consumers are rethinking their wish lists, while others are getting creative to acquire everything they want. After two tough years, many want to celebrate, even with dark clouds on the horizon.

To earn a greater share of this year’s holiday spend, brands and retailers need to understand what consumers see as non-negotiable, what they’re willing to pay more for—and what people with the most purchasing power expect to prioritize. To better understand individual perspectives, as well as their plans to shop and travel this holiday season, the IBM Institute for Business Value (IBV) surveyed more than 12,000 adults across nine countries (Brazil, Canada, France, Germany, India, Mexico, Spain, United Kingdom, United States) in August 2022.

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    Originally published 17 October 2022

    Economic fears overtake COVID concerns

    While 59% of individuals say they will be less concerned about COVID this holiday season, two in three say they will be more concerned about the economy. We found that 2022 shopping budgets are up 8% over 2021, and holiday travel budgets are up 49%. However, prices have increased, as well.

    That’s probably why economic concerns are top of mind this holiday season. 59% also report worrying more about supply chain disruptions that could make holiday shopping harder or more expensive.

    Anxiety and uncertainty have also taken a toll on individuals’ mental health. Roughly one in three say their mental health has worsened in the last 12 months, and 69% of these respondents say economic concerns were a top cause, cited more frequently than any other factor.

    72% of individuals say their monthly expenses rose in the last year, while fewer than one in three say their monthly income increased.

    To better understand the buying behavior of different individuals—and what influences their holiday purchasing decisions—we took a holistic view of consumer household finances. By analyzing changes in income, debt, expenses, and contributions to savings and investments, we identified four groups of consumers with vastly different financial circumstances: the Secure, the Insulated, the Frugal and the Strained.

    Financial circumstances also define, in part, each group’s holiday shopping and travel plans. From family vacations to gift exchanges to social gatherings, everyone will celebrate the holidays in their own way. However, individuals within these groups share many similar needs and priorities.

    For more detail on each of these groups and how brands and retailers can provide the products and services these consumers are willing to prioritize and pay more for:

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    Unequal outlooks
    Many consumers have seen their financial situation worsen in the past year—which could impact their holiday plans.

    Unequal outlooks
    Many consumers have seen their financial situation worsen in the past year—which could impact their holiday plans.

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    Changing priorities

    The holidays are just around the corner but, for many consumers, the season has already begun. Overall, holiday shopping is starting earlier this year, with 58% of consumers planning to begin buying before November. This is up from 44% last year, demonstrating a massive shift away from the traditional Black Friday start of the shopping season.

    Only one in three consumers plan to start holiday shopping in November or December. 78% plan to purchase holiday airfare before October (61%) or in October (17%).

    Due to expectations of supply chain disruption and price hikes, almost 2 in 3 shoppers are pre-ordering this holiday season.

    Sustainability is another top priority for consumers across the board. Despite widespread economic hardship, 54% more consumers are considering sustainability to a significant extent when shopping for the holidays, as compared to last year.

    This denotes a deeper commitment to environmental responsibility from those who may have been more ambivalent in the past.

    Overall, consumers are willing to pay extra for sustainability, as well. On average, they say they would pay a premium of 41% for sustainable products, 34% for more sustainable air travel, and 37% for more sustainable lodging this holiday season.

    Going all in for the environment
    Consumers are considering sustainability more seriously this holiday season.

    Going all in for the environment
    Consumers are considering sustainability more seriously this holiday season.

    Planning for uncertainty

    Of course, even the best-laid holiday plans aren’t set in stone. Our survey found that fluctuating gas prices, new COVID outbreaks, supply shortages, and economic hardship could all influence how consumers celebrate this year.

    If consumers are forced to cut their holiday budgets, 64% will reduce their travel spend, while 36% will spend less on physical goods. Of those who would reduce their travel spend, 35% would travel closer to home, 20% would drive more and fly less, 18% would stay with friends and family, 16% would cut international travel, and 7% would downgrade holiday travel experiences.

    Half of consumers plan to buy more online if COVID resurges and, on average, they plan to travel 7% less by road and 22% less by air.

    While travel could take a bigger hit from an economic downturn, brands and retailers should be mindful that if consumers are forced to reduce spending on their holiday shopping, more than 60% will cut nonessential items, including apparel, footwear, jewelry, and accessories.

    Shoppers that took advantage of sales earlier in the year may now be prioritizing distinctive gifts for the special people still on their lists. A large majority of those aged 25 to 39 (67%), 40 to 54 (70%), and over 55 (76%) are looking for unique products in addition to COVID-safe environments and free cancellations, order changes, and returns.

    As consumers look for new features and offerings from brands and retailers, companies that know their customers and target their strategies accordingly have an opportunity to attract more shoppers. Business leaders need to turn data into insights quickly and execute their strategies precisely to increase their market share this holiday season.

    Finding the perfect gift
    In addition to a COVID-safe environment and free cancellations, order changes, and returns, consumers want unique products.

    Finding the perfect gift
    In addition to a COVID-safe environment and free cancellations, order changes, and returns, consumers want unique products.

    Download the full report for more in-depth consumer analysis and actions businesses can take to win market share this holiday season:
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      Originally published 17 October 2022

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