TransUnion Report Finds More than Half of Consumers Plan to Spend $500+ this Holiday Shopping Season; Shoppers Plan to Increase Spending for Third Consecutive Year
Nearly a quarter of households with children plan to travel for vacation this holiday season, with cruises and resorts among top destinations.
More than half of Americans (51%) plan to spend more than $500 this holiday shopping season, a marked increase from the 36% who planned to do so in 2022. A new TransUnion (NYSE: TRU) report found that three in 10 consumers (29%) plan on spending more on holiday shopping than in the year prior, while only 16% say they will spend less.
Both data points represent the third consecutive year for their respective trends, indicating continuing consumer resiliency. The findings were corroborated by the amounts consumers plan to spend this year, with significant increases in the higher spend brackets. The shift was even more exaggerated in the drop at the lower end of planned spending.
Consumers remain resilient and their positive outlook for this year's holiday shopping season is a testament to the continued strength in the labor market, with wage growth outpacing inflation. The key for retailers will be to understand their principal consumer segments to deliver the right offers at the right time.
Planned Holiday Spending, 2023 vs 2022
Less than $100
More than $1,000
Among those planning to spend more, the majority represent high-income households, those earning $100,000 or more (59%), and households with children (63%). Among middle-income households, 25% plan to spend more, while 16% of low-income households will increase holiday spending. The full findings are available in the 2023 TransUnion Holiday Shopping Report.
“Despite what seems like a constant drumbeat of negative news—rising interest rates, persistently high inflation and more—consumers remain resilient and their positive outlook for this year's holiday shopping season is a testament to the continued strength in the labor market, with wage growth outpacing inflation," said Cecilia Seiden, vice president of TransUnion’s retail business. “The key for retailers will be to understand their principal consumer segments to deliver the right offers at the right time.”
Student loans expected to have limited impact on holiday spending
Nearly eight out of 10 (78%) consumers said resumed student loan payments will have no effect on their holiday shopping since they either do not hold student loans (66%), have been paying their loans during the pause (5%) or will finish their shopping before payments resume (7%).
However, among the 13% of consumers who say student loans will have a moderate or large impact on spending, half still plan to spend more on holiday shopping. Only 15% of this group say they will spend less this holiday season.
Prior TransUnion research found half of consumers with student loans have payments under $200 and 80% of borrowers paid less than $500 per month. While not insignificant, many high-income households can likely find ways to budget for these payments without sacrificing holiday gift buying.
The hottest gifts of 2023
When asked what types of gifts they plan to buy, the top three categories were gift cards (71%), clothing (71%) and toys (51%), reflecting a practical approach to their gifting plans. Those priorities shift somewhat when compared by consumers who plan to spend more, the same or less on holiday shopping this year.
Top Three Gift Categories for Consumers
Planning to Spend More, the Same or Less on Holiday Shopping
Gift Cards (69%)
Spending the Same
Gift Cards (74%)
Gift Cards (66%)
Beyond the top three gift categories, consumers who plan to spend the same or less were significantly less likely to plan gifting in discretionary categories. For example, 48% of consumers who plan to spend more identified events and experiences as a gift category compared to 23% of those planning to spend the same or planning to spend less.
Discretionary Gift Categories for Consumers
Planning to Spend More, the Same or Less on Holiday Shopping
Tickets for Events/ Experiences
Spending the Same
“It is critical for retailers to understand their customers at a granular level,” said Mark Rose, senior director of TransUnion’s retail business. “The ability to differentiate between audiences and tailor marketing and special offers accordingly makes a huge difference in how much business they can win.”
Consumer tolerance for security depends on in-store vs. online
The past year saw several high-profile “smash and grab” attacks on retailers, causing many to place more products inside security cases to prevent organized retail crime. While the majority of consumers (66%) say they haven’t noticed or don’t care that more products are being locked up, one-third of consumers dislike the practice.
In fact, 15% said they won’t wait to have an item unlocked by a store employee; 9% will instead purchase those items online; and another 9% will generally carry a negative view of the store. These findings vary slightly across regions in the U.S., with higher levels of negative feelings in the Northeast and West, which have been more highly affected by theft and organized retail crime.
Consumers are far less ambivalent about online security measures as they protect the consumers as well as the retailers. In fact, 96% of shoppers have a positive or at least neutral view of additional security measures. Six in 10 (59%) say added security makes them more likely to shop with that retailer and 37% say they are willing to spend the time to verify their identity without it affecting their shopping habits.
However, there was one point on which both groups agreed, which is that two-factor authentication is the top choice for online shopping security measures.
“A robust identity solution can help retailers make transactions smooth and seamless, while still delivering a friction-right customer experience that protects themselves and their customers from identity theft, account takeover and other forms of fraud,” said Seiden.
Households with children lead holiday vacation travel
Over half of families with children plan to travel this holiday season, with 33% visiting family and another 24% planning a holiday vacation. A similar number of households without children planned to travel to visit family (30%) while a much lower percentage planned to travel for vacation (14%).
These findings are part of research conducted for the 2023 TransUnion Holiday Travel Report, which includes insights regarding consumers’ plans on how long they plan to travel, where they want to stay and much more.
For households planning to travel for vacation, those with children—especially of younger ages—are much more likely to opt for relaxing trips than households without children. Households with children under six were more likely to prefer an all-inclusive vacation (38%) or cruise (33%), while households with older children were most likely to prefer a resort (52%) or a visit to a big city (48%). Comparatively, only 15% of households without children are planning an all-inclusive vacation, while 19% plan to take a cruise, and 28% plan to visit a big city.
More than half (57%) of those traveling for vacation plan to spend between $1,000 and $5,000. However, 18% are budgeting between $5,001 and $7,500, and another 17% plan to spend more than $7,500. Importantly, most families are not planning to increase their debt for these trips, with 42% paying with their debit card and 38% planning to use a credit card they will pay off before the next statement.
“This year marked a clear return to travel, although consumers are being thoughtful about not over-extending themselves financially while getting away” said Seiden. “Particularly for those with school-aged children, the holiday season is becoming an opportunity for a relaxing winter getaway.”
In preparation for the holiday season, retailers can leverage tools like the TransUnion TruAudience™ line of solutions to help model, create and segment relevant audiences. Doing so can help retailers better market to their key audiences.
Retailers should also consider the TransUnion TruValidate™ line suite of solutions, which comprise identity and device proofing technologies to help catch fraudsters early with insight into device history, reputation and behavior, while reducing friction for legitimate purchases.
Additionally, TLOxp, part of the TransUnion TruLookup™ solution line, provides deeper investigative insights to help link individuals and tie in-store theft to eCommerce fraud, and reduce retail shrink.
About the research
This online survey of 1,512 adults was conducted in August 2023, by TransUnion in partnership with third-party research provider, Dynata. Survey participants included adults 18 years of age and older residing in the United States- who will be shopping for holiday gifts this year. Participants were surveyed using an online research panel method across a combination of desktop, mobile, and tablet devices. Survey questions were administered in English. All U.S. regions are represented in the study survey responses. To ensure general population sample representativeness across United States resident demographics, the survey targeted respondents in line with the census statistics on the dimensions of age, household income, and region. Generations are defined as follows: Gen Z, born 1996- 2005; Millennials, born 1981-1995; Gen X, born 1966-1980; Baby Boomers, born 1945-1965; and Silent, born 1928-1944. These research results are unweighted and statistically significant at a 95% confidence level within ±2.5 percentage points based on calculated error margin. Please note some chart percentages may not add up to 100% due to rounding or multiple answers being accepted.
This online survey of 1,512 adults was conducted in August 2023, by TransUnion in partnership with third-party research provider, Dynata. Survey participants included adults 18 years of age and older residing in the United States - who will be shopping for holiday gifts this year. Data in this report is drawn from a subgroup of 739 adults who will be traveling during this upcoming holiday season, in addition to shopping for holiday gifts. This sample does not include US adults who will be traveling over the holidays but do not plan on shopping for holiday gifts this year. Participants were surveyed using an online research panel method across a combination of desktop, mobile, and tablet devices. Survey questions were administered in English. All U.S. regions are represented in the study survey responses. To ensure general population sample representativeness across United States resident demographics, the survey targeted respondents in line with the census statistics on the dimensions of age, household income, and region. Generations are defined as follows: Gen Z, born 1996- 2005; Millennials, born 1981-1995; Gen X, born 1966-1980; Baby Boomers, born 1945-1965; and Silent, born 1928-1944. Research results for the subgroup of holiday travelers are unweighted and statistically significant at a 95% confidence level within ±2.5 percentage points based on calculated error margin. Please note some chart percentages may not add up to 100% due to rounding or multiple answers being accepted.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company with over 12,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business