Consumers are embracing in-store holiday shopping this year, with a 53% year-over-year increase in those planning to shop exclusively at brick-and-mortar stores, according to a recent survey by customer-driven AI intelligence firm First Insight.
This resurgence contrasts with a 21% decline in plans to shop solely online, signalling a significant pivot from the pandemic-fueled e-commerce boom.
However, the season brings mixed news for retailers as one-third of shoppers plan to reduce their holiday budgets, citing caution following the recent U.S. presidential election.
In-store shopping rebounds
The survey highlights the growing appeal of physical retail, with nearly half of respondents planning a mix of in-store and online shopping. While traditional draws like quality and value are less of a factor this year, which is down 30% from 2022, other trends are emerging. Loyalty programmes are increasingly influential, with a 64% rise in shoppers citing these as key to their decisions.
“This year’s holiday season highlights a return to the essentials—competitive pricing and convenience. Our insights reveal not only a strong preference for in-store shopping and the growing importance of loyalty programmes but also suggests a willingness to invest in premium services like faster shipping. Retailers who adapt to these shifts by providing exceptional experiences and meaningful value will emerge as leaders during the critical year-end shopping season,” said Greg Petro, CEO of First Insight.
Holiday budgets are tightening, and gift cards, big-box retailers, and online marketplaces are losing favour. Gift card purchases are down 11%, while preferences for chains like Walmart and Amazon have plummeted 51% and 66%, respectively. Coupons are also falling out of use, with only 6% planning to increase their coupon usage this year, a sharp drop from 27% in 2022.
Meanwhile, shipping costs are less of a deterrent, with 36% more consumers willing to pay over $20 for faster delivery. Gen Z and male shoppers, in particular, are more inclined toward these last-minute conveniences.
Social media’s waning influence
Social platforms like Instagram and Pinterest are seeing a 20% decline in holiday shopping inspiration. Yet, affluent shoppers remain active in social commerce, with two-thirds of those earning over $250,000 planning to make purchases on platforms like Facebook and YouTube.
A 44% increase in shoppers starting their holiday purchases post-Thanksgiving reflects a growing tendency to delay buying for better deals. Retailers may face compressed demand windows as a result.
Despite reduced overall spending, footwear is bucking the trend, showing a 19% rise in online purchase intentions, a rare bright spot for e-commerce this season.