Consumer Surveys Find Even Deals Aren’t Enough This Holiday Season – WWD

Consumer reports have consistently characterized a frugal shopper this holiday season with price as a leading factor in decision-making at checkout, but despite all concerns, consumers have said the holidays will come and they will plan to shop.

Unfortunately, plans of spending more and accruing increased financial stress to create a festive holiday season still might not be enough amid inflation. According to a study conducted by Qualtrics on behalf of Credit Karma, nearly 40 percent of Americans say they are unable to afford gifts this holiday season, citing the rising cost of living (64 percent) and inflation (53 percent) among other key factors including “living paycheck to paycheck” (53 percent) and “not having saved enough money” (51 percent).

Notably, 38 percent of survey respondents told Credit Karma they “want to cry when thinking about the cost of holidays this year.”

While nearly half of Americans say they will decrease spending this year compared to last year (48 percent) of those who plan to spend more (21 percent) 44 percent say the increase is a result of rising costs of goods, rather than planning for a more extravagant celebration. Another 37 percent of those planning to spend more cited feeling an obligation to treat those who they love.

To afford gifts this year, a third of survey respondents say they’re willing to make sacrifices. For 32 percent, this means dipping into savings, while 24 percent will give up travel, 20 percent will sacrifice holiday decor and 19 percent will give up hosting holiday events. Credit Karma additionally noted that it’s important to call out that 16 percent of respondents say they’re even willing to “sacrifice groceries to afford gifts this holiday season.”

When it comes to what they are giving, 53 percent of consumers reported they will buy gift cards, 52 percent said clothes and accessories, 37 percent said toys, 32 percent say cash gifts and 25 percent said they plan to give self care or beauty items. Categories with less interest (falling between 17 and 24 percent of consumers planning to gift) included food or drinks, electronics, gaming devices and accessories, books, crafts and homemade gifts and home.

“For most, the holidays are a wonderful time of the year, a time when we get to come together with family and friends and celebrate the various occasions that matter most to us,” said Colleen McCreary, consumer financial advocate at Credit Karma. “However, behind the festivities and fun are the expenses that come with, and, at the end of the day, somebody has to foot the bill. While costly holidays are something we have all come to expect, things are looking a little different this year with record inflation and a continuously uncertain market.”

As American consumers plan to spend more to keep up with traditions, the shopping season has continued to expand over the past several years, seeing shoppers begin making holiday purchases as early as July to take advantage of the best deals possible. When asked, however, consumers told Credit Karma that because of inflation, this year’s deals aren’t quite enough.

According to Credit Karma’s findings, 46 percent of Americans started their holiday shopping early because of inflation with the largest group of consumers doing a majority of their shopping on Amazon (38 percent) or in person at chain stores and shopping malls (28 percent). However, even with a head start, 23 percent of consumers say they have already gone into debt because of early shopping this season. This was most true for Millennials (37 percent) and Gen Z (32 percent).

Moreover, nearly half of Americans (48 percent) say holiday sales “won’t make a difference” and 45 percent “worry they’re being taken advantage of when shopping major holiday sales.” More than half (51 percent) of respondents told Credit Karma they have been tricked into thinking they were getting a deal during holiday sales.

Authors of Credit Karma’s report explained that this feeling of being tricked is in part due to confusion caused by inflation, where consumers are less likely to know when they’re actually getting a good deal on a “sale” item.

“With sustained inflation, labor shortages and supply chain issues, it’s not easy to find a deal this holiday season,” McCreary said. Credit Karma has advised its community of shoppers to have a plan when shopping this year and to be vigilant about comparison shopping to ensure the price being advertised qualifies as a deal when it is listed as being on sale. Additionally, consumers are looking to buy from retailers where they can use coupons and promo codes — often through online tools like Credit Karma Money, Honey or Rakuten.

Credit Karma’s report further highlights that for holiday shoppers, social media is also coming out as a key tool for gift ideas — both for discovery and finding promo codes. Overall, the survey revealed 24 percent of holiday shoppers say they’re somewhat to very likely to buy a gift they have seen promoted on TikTok and another 26 percent said they are likely to buy a gift being promoted on Instagram.

Promo codes from social media influencers stood out in the survey as being of particular interest to shoppers this year with 47 percent saying they are reliant on these codes or coupons. This was especially common for Millennials (59 percent) and high earners (those with annual income above $100,000) at 53 percent.