The holidays — for retailers, it’s both the most wonderful and most stressful time of the year. Our latest 2024 Holiday Shopper Report, “Gift or Grinch? Unwrapping This Season’s Shopper Spending Plans,” just launched, revealing some eye-opening insights.
In collaboration with Arlington Research, we surveyed 4,000 U.S. and U.K. consumers in July to gauge how shoppers are feeling about the upcoming season. While there’s plenty of holiday cheer to go around, there are also a few “Grinch-y” moments that retailers should take note of.
As Coveo’s Chief Marketing Officer, it’s exciting to see how AI is transforming the retail experience. The role of technology is no longer just to facilitate a transaction — it’s about creating meaningful, personalized interactions that drive value for both retailers and consumers.
Let’s dive into some of the report’s findings and what they mean for retailers.
Shoppers are Cutting Back…but Not Where You Think
One of the first numbers from the report that caught our eye: 59% of shoppers say they plan to cut back on everyday purchases just to expand their gifting budgets. People are tightening their belts on non-essentials in order to splash out when it matters most — on gifts for loved ones. And here’s another festive treat: more than three-quarters of shoppers (76%) are either maintaining or increasing their holiday gift spending this year.
This is a clear signal that despite economic pressures, shoppers are planning to make the holiday season special, and are ready to spend, albeit wisely. They’re making trade-offs in their everyday lives to bring the holiday magic when it matters. Retailers who meet them with tailored offers and experiences will have a winning edge.
Shoppers Are Ready to Be Persuaded — Are Retailers Ready to Deliver?
One of the most intriguing insights from the report is the openness of shoppers to unplanned purchases. A staggering 90% of consumers surveyed said they are willing to add items to an existing order if persuaded effectively. Moreover, 85% admitted they’re prone to impulse buys online, particularly when shopping for fashion and apparel.
What does this mean for retailers? Shoppers are not just open to inspiration; they are actively seeking it. Consumers want to be surprised with recommendations that feel timely, relevant, and personalized. This is where AI-driven strategies come into play.
This is a golden opportunity for retailers to lean into the capabilities of AI-powered search and product discovery. By understanding shopper behavior in real time and delivering hyper-relevant recommendations and offers, retailers can increase basket sizes and overall revenue. But more than that, it’s about building trust and loyalty through consistent, personalized experiences that resonate with what shoppers are truly looking for — both consciously and subconsciously.
AI: The Future of Gift Guidance
Perhaps one of the most exciting trends emerging from our research is the growing role of Generative AI in guiding gift purchases. Nearly a third (31%) of online shoppers are already turning to GenAI-powered advisory tools to help them find the perfect gifts.
This is more than just a trend — it’s a glimpse into the future of retail. Consumers want guidance. They’re looking for recommendations that are relevant, personalized, and aligned with their unique preferences and needs. And GenAI is perfectly positioned to provide this. Imagine a world where shoppers can describe a vague idea of what they’re looking for — “something for a dad who loves tech, but not too expensive” — and GenAI offers a curated selection of items that match.
For retailers, this means embracing GenAI as a trusted advisor that enhances the customer experience, helping shoppers feel more confident and less overwhelmed during the often stressful holiday shopping period. By offering GenAI-powered gift guides and search tools, retailers can meet this growing demand and deliver tailored experiences that resonate with each customer on a personal level.
Black Friday and Cyber Monday: Still Going Strong
While the debate continues about whether Black Friday and Cyber Monday are still the shopping juggernauts they once were, our survey shows they’re still going strong. Over two-thirds (68%) of shoppers are planning to take part in these mega-sales, with visits to electronics, fashion, and big box stores being the most popular. That’s a hefty chunk of holiday shopping being done in just a few days.
Although physical stores remain a crucial aspect of the shopping experience, digital channels are indispensable, no matter where customers decide to make a purchase. Our own consumer research shows that 59% of shoppers research products online before buying from an e-commerce retailer, and 47% research products online before purchasing in-store. Engaging customers at every touchpoint is essential. A robust search and product discovery experience boosts both online sales and in-store performance.
The Convenience of Online Grocery Shopping Is Growing
Interestingly, grocery shopping is making a significant move into the digital space this holiday season. More than half of the consumers we surveyed said they plan to shop online for groceries during the holiday season, with 20% reporting an increase in their typical online grocery habits. This is particularly pronounced among Millennials and Gen Z, 68% and 69% of whom, respectively, plan to take advantage of online grocery services.
For grocery retailers, this is a clear signal that digital convenience is no longer just a nice-to-have — it’s an expectation. Whether through apps or direct online platforms, retailers must be prepared to meet this demand with seamless, efficient digital experiences.
Balancing Convenience with the Holiday “Chore”
One of the more nuanced findings in the report is how consumers view holiday shopping itself. While 45% of U.S. shoppers say they enjoy the thrill of finding the perfect gift, a notable 19% find it to be a chore due to the time and expense involved. Additionally, 61% expressed interest in site search categories like “gifts under $50,” indicating a strong desire for simplified shopping experiences that reduce decision fatigue.
This presents yet another opportunity for retailers to lean on AI and other digital tools. By offering intuitive search filters and personalized product recommendations, retailers can make the shopping experience more enjoyable and less cumbersome — turning what might feel like a chore into a rewarding experience.
A Season of Opportunity
The bottom line from Coveo’s holiday report? Shoppers are eager, excited, and, perhaps most importantly, open to persuasion. This holiday season, retailers have a golden opportunity to connect with customers in new and innovative ways. By leveraging AI to deliver personalized experiences, retailers can capture shopper attention, increase cart sizes, and create memorable holiday moments.
Make sure this holiday season is one to remember!