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Holiday Shoppers Want Free Shipping More Than Deals

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Free shipping will be more of a sweet spot than deals for holiday shoppers this year.

Consumers are always looking for good deals but the biggest wish this holiday season will be free shipping, reports The NPD Group. The insight is critical amid an e-commerce explosion in the beauty sector.

Related: Holiday Beauty Trends for 2020

As consumers increase their online shopping, free shipping, for the first time, was identified as the number one factor influencing where consumers decide to shop this holiday, according to insights from NPD’s annual holiday purchase intentions study.

In the United States, 52% of consumers say they plan to start holiday shopping on Thanksgiving Day or later.

Data & insights: Holiday 2020 Outlook

However, consumers did partake in Amazon Prime Days this year, with general merchandise sales results from NPD’s early indicator report for the week ending October 16, 2020, showing the early promotions brought a 21% boost to dollar sales compared to the same week last year. 

Consumers plan to spend an average of $691 this holiday season, which is a decline from last year but on par with 2018 plans. Those who plan to spend the same amount they did last year declined by 11 points compared to last year, making it in favor of those who plan to spend less. 

As for the state of the economy, 57% of shoppers rate it poorly (up from 37% last year), and 30% say they will spend less because of the state of the economy (up from 23% in 2019).

Even with the state of the economy, consumer feelings about their personal financial situation has not changed since 2019. Twenty-nine percent of consumers will spend more this year because they have fewer expenses related to travel, dining out, etc. as part of the current departure from experiences.

Marshal Cohen, NPD’s chief industry adviser, retail, said, "Consumers plan to do more of their holiday shopping online this year, and this includes shipping gifts to family and friends with whom they won’t be able to celebrate in person this year. The addition of shipping fees to all of these deliveries is a bigger financial burden on consumers than getting the best deal on the item itself.”

Cohen added, “Through much of 2020, retail spending as a whole has not seen the big declines expected, pointing to the consumer’s willingness to spend despite economic uncertainty. This year consumers appear to have more interest in ‘retail therapy’ and an aspiration to return to normalcy. We also know that, historically, consumers are pre-conditioned when it comes to holiday shopping behaviors, which means even the best promotions won’t drastically alter the core trends of the season."

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