Amidst economic instability and rising inflation, luxury consumers are set to maintain or increase their spending this holiday season, according to a new report from Saks.
75 percent of luxury shoppers plan to spend the same amount or more this holiday season compared to last year, reflecting a steady trend, as outlined in the Sakes Luxury Pulse survey conducted in October. Data from Deloitte's 2023 Holiday Retail Survey supports these findings, showing that individuals earning over 200,000 US dollars annually are expected to spend up to 22 percent more this holiday season.
Saks survey's findings also align with the National Retail Federation's forecasts, which anticipate a consistent 3-4 percent annual growth in retail consumer spending compared to last year.
However, rather than making most of their purchases in stores, Saks found that 64 percent of luxury shoppers intend to primarily make their holiday purchases online, marking a 15 percent increase from last year's figure.
US luxury consumers opting to shop later for the holidays
The Saks Luxury Pulse survey highlights a shift in luxury consumer behavior, indicating a tendency to start shopping post-Thanksgiving, later than the previous year. This differs from the expected shopping patterns in other categories. With more luxury shoppers waiting to take advantage of sales events, notably, 66 percent plan to shop during the Black Friday and Cyber Monday (BFCM) week, a significant increase from the 49 percent who did so in 2022, according to Deloitte.
Luxury shoppers in the US also intend to spend 46 percent of their holiday budget on themselves and 54 percent on gifts for others. Millennials are more inclined to self-gift, splitting their spending evenly between themselves and others, while Baby Boomers and the Silent Generation were found to lean more towards spending more on others, according to the Saks survey.
The survey also noted a slight decrease from the last survey in luxury consumers planning trips, with 69 percent either booking or planning one soon, in line with data from consultancy Bain & Company, who told Reuters that the situation currently seems "normal" for now.
In addition, luxury shoppers' enthusiasm for dressing up and attending events is set to remain high through the season, as 83 percent expect to attend parties, with 84 percent dressing up as much or more than last holiday season. Overall, 81 percent of survey respondents said they plan to purchase new outfits for the festivities.
“Amid a challenging economic environment, we’re pleased to see that the luxury consumer is ready to shop and celebrate this holiday season, and we remain committed to our strategy to be the luxury shopping destination of choice for the full continuum of luxury consumers,” said Marc Metrick, CEO of Saks in a statement. “Yet, we continue to take a more measured approach to our outlook on this holiday season, and the results reinforce our view that the luxury consumer is resilient. "
Luxury shoppers likely to keep consistent spending plans
Saks' recent survey shows a stable interest in luxury spending, with 57 percent of luxury consumers planning to spend the same or more in the next three months, reflecting the previous survey's findings. However, the survey found a slight 4 percent decrease in this spending intent among those earning more than 200,000 US dollars annually.
The survey also notes a dip in economic confidence among luxury shoppers, with a 9 percent rise in economic concerns since the last survey. Despite this, 64 percent of respondents remain optimistic about their personal finances. Millennials were particularly optimistic, with 39 percent positive about the economy and 69 percent about their finances.
According to the survey's findings, there is also a shift among entry-level luxury consumers (earning 100,000 US dollars annually or less), who are less inclined to wait for sales, suggesting a readiness to buy luxury items at full price before the holidays instead of seeking discounted options.
"At Saks, we’re committed to building lasting and meaningful relationships with luxury consumers and serving them with innovative experiences that drive engagement and brand loyalty," added Emily Essner, chief marketing officer at Saks, in a statement.
“The latest Saks Luxury Pulse helps us better understand luxury consumers’ holiday spending plans. We’re pleased to see the continued appetite for luxury and look forward to delighting our customers throughout the holiday season and beyond.”