CHICAGO — With talk of rising costs and inflation and how consumers’ holiday shopping might be affected, retailers and industry experts alike have been speculating whether this holiday will be a season of cheer or a season of fear. Are consumers still planning to spend, or will they be more money conscious?

Circana’s newly released Holiday Purchase Intentions Study just might have some of the answers. The annual study combines valuable perspective on how consumer behavior is changing compared to recent years when it comes to spending and celebrations, as well as new insight into things that are having the biggest impact on that behavior, such as the economy, demographics, timing, value, social media and pent-up demand.

“Consumers are giving thought to spending less this holiday season, but they’re still setting their own purchase priorities,”  said Marshal Cohen, chief industry advisor at Circana. In Cohen’s written report about the study, he points out that “consumers convey conflicted feelings about spending this holiday season,” and “old and new traditions come together for a different kind of shopping season.”

Conclusions Cohen made in the report include:

• Overall, consumers plan to spend similarly to last year on holiday shopping, but they are also prepared to spend more on core gift items.
• Demographics reveal unexpected shifts, with the largest declines in the upper- and lower-income segments.
• Planned credit card usage has hit a new high.
• Plans for both charitable giving and self-gifting have fallen this year.
• Negative feelings about the economy and personal financial situations have both escalated, compounding last year’s concerns.
• Mass merchants, department, chain and clothing stores are high on shoppers’ lists, but stores providing food, value and an experience will capture more of the consumer’s attention.
• Nearly one-third of the respondents, 29%, plan to spend on the home, with a mean spend of $348.
• More consumers will celebrate the holidays at home – 61% of consumers plan to eat their Christmas meal at home, up five percentage points from last year.

“Conflicted spending apprehension from the consumer, combined with the potential for a three-week long, last-minute spending surge in December, makes Holiday 2023 a complex one to plan for and measure,” Cohen added in the report. “Christmas Day lands on a Monday this year, which will split Super Saturday shopping once again (between Dec. 23 and the weekend before), while also giving consumers the ability to push their shopping right up to the last minute on Sunday, Dec. 24. Retailers will need to wait for Christmas week results to get a true read on how the traditional season ended.”

Consumers will not only be shopping later than usual for the holiday season, but they’ll also be putting a higher emphasis on getting a good deal. Circana’s report says: “Overall value for the price and special sale price both grew as top factors that will influence where consumers will shop for gifts this year, identified by more than 40% of holiday shoppers.”

The 22-page robust report also covers the growth and decline of gift categories, how social media will influence consumers’ decisions and more.

See also:

• Customers want the furniture shopping experience, so ‘submerge’ them in it
• Survey hints at how home can grab some of that higher holiday spending

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WASHINGTON – Despite elevated mortgage rates averaging above 7%, single-family starts posted a gain in September, according to the National Assn. of Home Builders, which says more buyers are turning to new homes because of a dearth of inventory in the resale market.

Overall housing starts increased 7% in September to a seasonally adjusted annual rate of 1.36 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The September reading of 1.36 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 3.2% to a 963,000 seasonally adjusted annual rate.

However, single-family starts are 12.8% lower year-to-date due to higher interest rates. The multifamily sector, which includes apartment buildings and condos, increased 17.6% to an annualized 395,000 pace.

“The uptick in single-family production was somewhat unexpected as our latest builder surveys indicate that starts are likely to weaken in the months ahead due to recent higher mortgage rates that were near 7.6% in mid-October,” said Alicia Huey, NAHB chairman and custom home builder. “Meanwhile, builders also continue to face persistent labor shortages, a lack of buildable lots and higher financing costs for acquisition and development loans.”

“Despite ongoing challenges in the market, the housing deficit of resale inventory continues to provide some market support for builders,” said NAHB Chief Economist Robert Dietz. “Because of a lack of existing homes in the marketplace, 31% of homes available for sale in August were new construction. This compares with a historical average in the 12-14% range. But in another sign that higher interest rates have slowed the market, the number of single-family homes under construction in September was 674,000, which is almost 15% lower than a year ago.”

On a regional and year-to-date basis, combined single-family and multifamily starts are 23.3% lower in the Northeast, 12.9% lower in the Midwest, 7.8% lower in the South and 16.9% lower in the West.

Overall permits decreased 4.4% to a 1.47 million unit annualized rate in September. Single-family permits increased 1.8% to a 965,000 unit rate. Single-family permits are down 13.4% year-to-date. Multifamily permits decreased 14.3% to an annualized 508,000 pace.

Looking at regional permit data on a year-to-date basis, permits are 22.3% lower in the Northeast, 16.6% lower in the Midwest, 12.7% lower in the South and 17.6% lower in the West.

The number of apartments under construction is near 1 million units and will be falling in the months ahead, predicts the NAHB.

See also:

• Customers want the furniture shopping experience, so ‘submerge’ them in it
• Legacy Classic and Trisha Yearwood complete their transition with Market debut

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SAN FRANCISCO – Gen Z consumers are not turning out to be the online shoppers many thought they would be according to a new study from online marketplace Faire.

In a twist, the latest research shows that the world’s first digitally native generation has an increased preference in-store shopping. In a survey of 1,000 U.S. consumers ages 18-26 conducted by Wakefield Research on behalf of Faire, 61 percent of Gen Z adults reported they are more likely to shop in-person than online compared to a few years ago.

Financial incentives for in-store shopping

With $360 billion of disposable income that “will accelerate in the coming decade as the younger cohort reaches financial maturity,” per Faire, Gen Z consumers are becoming retail’s next big focus. But, entering the workforce amid the COVID-19 pandemic, mass layoffs, war and nationwide cost of living concerns, has impacted what and how they spend.

According to Faire’s survey, more than 90% of Gen Z reported the rising cost of living has impacted how they shop, 56% are seeking deals and discounts and checking the price of items more often than before, and nearly 50% are following a stricter budget.

The results also reveal why in-store shopping may be so appealing to the budget weary generation: It helps them be more discerning shoppers. According to Faire’s survey, half of Gen Z adults reported spending more wisely when shopping in-person, and 40% say they are more confident in purchases made in-store. Three in four responders also admitted to buying things online that they don’t need simply because it is easy to purchase, and one-third spend more money than they are comfortable with when shopping online.

“Gen Z shoppers have consistently led the charge against monolithic consumerism. They purchase based on their values and prioritize sustainability more than any other generation,” said Lauren Cooks Levitan, Faire’s chief financial officer. “Shopping in-store makes it easy for them to keep those same principles and be more fiscally responsible during this difficult economic period. This leads to an overall more meaningful shopping experience than they are able to find online.”

Hunger for brick-and-mortar experiences

In addition to its monetary effects, entering adulthood amid a crisis prompts emotional changes and shifts in shopping motivation. Research has shown that nostalgia is particularly potent during times of crisis, and for Gen Z, the so-called loneliest generation per Statista, offline experiences help them socialize and connect post-pandemic.

According to Faire’s survey, 34% of Gen Z make a full day of it when they shop in-person, and 32% prefer to shop in person because they would rather be with their friends and not shop alone.

“Younger generations have long gravitated to in-person shopping experiences for community, self-expression and the joys of real-life discovery,” explained Kirsten Green, founder and managing partner of venture capital firm Forerunner Ventures. “This was once centralized around malls, but now boutiques and independent retailers — from home accessory concept stores to third wave coffee shops — have become gathering hubs.

“Gen Z is, sadly, a generation that’s proving prone to loneliness and isolation, often driven by technology. But they are also highly individualistic. It makes perfect sense that they see brick-and-mortar boutiques and independent retail as modern outlets for connection and experimentation.”

E-commerce as the new showroom

While online continues to be a shopping destination for Gen Z, e-commerce plays a very specific role to the generation that dedicates itself to extensive “search and discovery” phases, per Faire.

Recent data from consumer investment firm Forerunner Ventures revealed that three quarters of Gen Z consumers reported spending between a few hours and a few days researching an item before buying. When shopping for enjoyment, 41% of Gen Z also say they gather inspiration by browsing online, despite mostly not executing or completing their purchase there.

This hesitancy to execute online is “seemingly at least partly due to the fact that online shopping doesn’t guarantee quality,” according to the Faire survey, which found that 43% of Gen Z have returned part of an online shopping order due to quality issues, and 52% tend to shop online from retailers they already know and trust.

What are Gen Z’s shopping plans this holiday season?

Overall, these distinct differences towards offline and online channels will affect how Gen Z shops this year and beyond. This year though, the Faire survey found that the majority of Gen Z adults plan to shop for gifts with a combination of online and brick-and-mortar retailers this holiday season.

Additionally, nearly one-fourth plan to shop mostly in-store, and 20% plan to find inspiration online and then purchase in-store.

Faire’s survey was conducted by Wakefield Research among 1,000 nationally representative U.S. adults ages 18-26 between Aug. 3-9 using an email invitation and an online survey. This survey was designed by Forerunner’s survey was conducted online June 29-30 among 524 adults ages 18-27 living in the U.S.

See also:

• Why Gen Z could be a bright spot for the sagging home category
• The big reveal: What Gen Z, Millennials are buying for their homes

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NEW YORK — Consumers are intent on making this a merry holiday by spending more despite their acknowledgement that prices are rising and inflation is having an impact. However, the home category will be challenged to get its share of that windfall.

The 2023 Deloitte Holiday Retail Survey finds the average spend for the holidays will be $1,652, which represents a 14% year-over-year increase, or a more modest 2.5% when compounded annually over four years. Nearly all consumers surveyed plan to take part in the season (95%), which is up from 92% last and 88% in 2021, reflecting a return to pre-pandemic levels.

When asked which holiday categories were the tops for gifting this year, gift cards took over the No. 1 spot, edging out clothing and accessories. Home and kitchen, meanwhile, dropped to the bottom of the list, replaced by health and wellness-related presents.

Where home does have some momentum is in the non-gift sector, which accounts for $466, or about 28%, of the anticipated $1,652 total. From that total, consumers are also allocating $554, or about 34% to gifts, with the remainder going toward experiences such as entertaining at home and frequenting restaurants or events.

Of the 82% who plan to shop for non-gift items, 59% will be spending some of that money on home furnishings and holiday decorations, according to Deloitte’s survey. While the average spend on non-gift is $466, it rises among those with incomes of $100,000 to $199,000 to $600 and jumps to $1,001 for consumers in the $200,000-plus income bracket.

In fact, high-income individuals are planning to spend far above the $1,652 average this year, with $100,000 to $199,000 earners setting aside $2,167 for holiday purchases, and the $200,000-plus crowd earmarking nearly $4,000.

Home furnishings could also attract those who plan to buy gifts for themselves, which could be as high as 75% of those surveyed. Practical/useful gifts are desired by 51% of self-gifters, while comforting/relaxing ones (39%) and long-lasting use items (39%) are also highly rated.

Nearly three-fourths of consumers are anticipating higher prices across the board this year, but the biggest increases are expected in food and beverage (86%). The survey found 72% of consumers expect home and kitchen prices to be higher as well.

And despite the efforts to spur earlier shopping, two-thirds of holiday shoppers plan to do so during Thanksgiving week vs. 49% in 2022, most likely lured by the Black Friday/Cyber Monday deals.

The Deloitte survey, which was fielded between Aug. 30 and Sept. 8, polled 4,330 consumers. It also surveyed 43 retail executives between June 23 and 30.

See also:

• Small businesses plan big: It’s deals and A.I. this holiday season
• Home Depot gets ahead of the holidays with online décor sale

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WASHINGTON — Furniture and home furnishings sales in September were nearly six points off the pace set in 2022, but the year-over-year decline was less severe than recent months, according to the Department of Commerce’s advance monthly estimates.

For the month, furniture and home furnishings recorded an estimated $10.998 billion in adjusted sales, down 5.9% compared with September 2022’s $11.69 billion. In August, furniture and home furnishings sales were off the year-over-year pace by 7.8% and missed the mark by 6.3% in July.

September was essentially flat compared with August’s adjusted $11.003 billion in sales. Year-to-date, the DOC says furniture and home furnishings sales are at $100.18 billion, down 4.4% compared with the same span in 2022.

The overall retail snapshot showed $704.881 billion in adjusted estimated sales in September, up 3.8% vs. $679.379 last year and 0.7% compared with $699.882 in August.

While furniture was off the 2022 pace, it wasn’t alone, as the building material, garden equipment and supplies dealers category was down 4% year-over-year. Other notable declines included gas stations (down 3.5%), electronics and appliance stores (down 2.2%) and sporting goods, hobby, musical instrument and book stores (down 2.1%).

Conversely, food services and drinking places (9.2%), non-store retailers (8.4%), health and personal care stores (8.3%) and motor vehicle and parts dealers (6.2%) all showed sharp year-over-year increases.

The DOC’s advance estimates are based on a sub-sample of the U.S. Census Bureau’s full retail and food services sample. A stratified random sampling method is used to select approximately 5,500 retail and food services firms whose sales are then weighted and benchmarked to represent the complete universe of more than 3 million retail and food services firms.

See also:

• Consumers make less space in their wallets for home-related purchases
• Consumers are buckling says former Walmart CEO, as retailers push weaker-than-usual bargains

The post Furniture remains off pace in September, but decline not as steep appeared first on Furniture Today.

HIGH POINT — Just how much has expected U.S. consumer spending for home-related products decreased over the past couple of years? According to Deloitte’s Global State of the Consumer Tracker, plans to buy home furnishings and electronics have eroded fairly steadily.

Looking at the oldest data available from Sept. 26, 2021, U.S. consumers planned to allocate 8% of their share of wallet over the next four weeks toward home furnishings and electronics. Broken down by age group, it was 10% for those 18 to 34, 9% for those 35 to 54 and 4% for the 55 and older group.

A year later, however, on Sept. 26, 2022, the oldest group’s number declined to 3% of their share of wallet for home and electronics purchases over a four-week period. For the 35 to 54 group, it dropped two percentage points to 7%, while the Gen Z and Millennial group declined to 9%. Among all age groups combined, share of wallet for the category fell to 6%.

The most recent data available this year, from Aug. 28, shows an even sharper decline in planned spending for home, dropping to 3% among the combined ages, about a 62% change over a two-year span. In almost a year’s time, the youngest group was down to allocating 4%, while planned spending within the 35 to 54 sector fell to 3%, and Boomers and older Gen Xers were only setting aside 2% of their wallet share for home and electronics.

In contrast, while also seeing a decline between September 2021 and August 2023, clothing and personal care’s share of wallet dropped to 8% from 11%, a 27% decline. The pullback on recreation and leisure was also more gradual, dropping to 11% in 2023 from 13% in 2021, about a 15% fluctuation.

Where is the spending allocation going? Share of wallet committed for housing over the two-year period for all U.S. consumers tracked rose to 25% from 13%, a 92% increase. Groceries, meanwhile, rose much more modestly, from 12% in 2021 and ‘22 to 13% in 2023.

Deloitte’s Global State of the Consumer Tracker is an online panel survey fielded across 24 countries and targeting 1,000 adults 18 or older in each country.

See also: How are U.S. consumers allocating $933 billion in home improvement spending?

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SEATTLE — Amazon is declaring its recent Prime Big Deal Days a success, noting it topped last year’s October kick-off for holiday shopping.

According to the online retailer, Prime members purchased more than 25 million items with same day or next-day delivery over the two-day event, with apparel, beauty, home and toys leading in category sales.

“Prime Big Deal Days was a strong start to the holiday shopping season, offering Prime members an exclusive early opportunity to save and surpassing our expectations,” said Doug Herrington, CEO of Worldwide Amazon Stores. “This event outpaced last year’s holiday kick-off event, with more Prime members shopping this year.”

Chicago-based data and tech company Numerator, which tracked the Prime Big Deal Days sales live, posted on its tracker that the sale concluded with data from 73,432 orders among 31,607 unique buyers who purchased more than 137,000 items.

Nearly half (45%) of orders per household were single orders, according to Numerator, while 11% of households placed five or more orders. About one-fifth (18%) spent more than $200 per household, while the highest numbers were in the $100 or less (22%) or $200 or less (20%). The remaining 40% spent $50 or less per household.

Broken down by average order size, 22% of shoppers spent $20 or less, while just 4% spent more than $200 per order. The average spend per item came out to $27.90.

Numerator’s research put home goods as the No. 2 category, garnering 23% of purchases, just behind apparel and shoes at 25%.

The vast majority (88%) of shoppers were Prime members, and 95% came to the Amazon site already aware that the Big Deal Days event was happening.

Asked about the quality of the deals, 25% said they were extremely satisfied with what was on offer, and 33% each were very satisfied or somewhat satisfied. That left just 9% who were only slightly or not at all satisfied. Numerator surveyed 3,000 verified buyers.

See also:

• Amazon posts strong Q2; spotlights fulfillment and A.I.
• How low did they go? Furniture sellers among major discounters on Prime Day

The post Was the Big Deal Days event a big deal? Amazon seems to think so appeared first on Furniture Today.

NEW YORK — The furniture industry can take solace in the fact that about two-thirds of U.S. shoppers plan to buy home furnishings in the next year, but the biggest spenders are likely to be from niche groups.

The Provoke Insights fall 2023 study, conducted in conjunction with Furniture Today, reveals that shoppers expecting to spend $1,000 or more on furniture come from three distinct demographics: high-income individuals (65%), parents (53%) and Millennials (52%).

Looking more generally, 68% of those surveyed said they planned to buy furniture of any price in the next year. Interest was strongest among Gen Z (82%) and Millennials (72%), as well as parents (81%), those in a good financial situation (73%) and urban dwellers (77%).

The survey showed monthly furniture purchases inched up slightly this fall, with 13% saying they made a furniture purchase in the past month vs. 12% who did so in spring.

Inflation remains a concern among consumer as 32% of furniture shoppers have noticed a price increase. This number has held steady since 2022.

However, respondents have seen the impact of inflation to a lower extent in the furniture store category than in other retail channels in which they may also shop for furniture such as big box/superstores (58%), department stores (56%) and e-commerce sites (41%).

The leading categories on consumers’ furniture shopping lists are sofa/loveseats (34%), mattresses (32%), bedroom furniture (31%) and lamps/lighting (30%). Those numbers mirror fairly closely what respondents said in a spring study when mattresses took the top spot, followed by sofas, lighting and bedroom sets. Baby furniture and buffets/sideboards rank lowest among all categories offered for the fall survey.

The majority of respondents (62%) continue to make furniture purchases in person vs. using a computer (25%) or a smartphone (15%). This fits with the 52% of planned purchasers who said they enjoy browsing through store aisles. And even 39% who aren’t making a purchase still like the window-shopping experience.

A little more than one-fourth of respondents (27%) noted that brand names were very or extremely important to them when making a furniture purchase, while 23% said brand was not important at all. The remaining half categorized brand as being somewhat or moderately important.

When compared with other product categories, furniture is among the lowest in brand loyalty, which sees its highest numbers in electronics, beer, vitamins, video games and airlines. Only apparel and home improvement products have lower brand loyalty than furniture. The ranking was based on the percentage of respondents who stated they mostly purchased a particular brand or only purchased that brand.

More important to furniture buyers is the sustainability message, with 81% agreeing they would pay more for sustainable items. How much more? About one-fifth (19%) would pay between 10% and 24% extra, while 38% would ante up between 5% and 9%, and about the same number (37%) would only opt for a premium of between 1% and 4%.

Social media is also having a bit of an impact on furniture shoppers. One-fifth said they remember furniture ads the most when they come from YouTube, and 17% acknowledged they are more motivated to learn about a furniture brand after seeing an ad on Instagram.

For its fall survey, Provoke Insights polled 1,500 U.S. participants between ages 21 and 65 during September.

See also:

• The big reveal: What Gen Z, Millennials are buying for their homes
• How are U.S. consumers allocating $933 billion in home improvement spending?

The post Affluent soccer moms? Niche groups could lead furniture buying next year appeared first on Furniture Today.

WASHINGTON — Consumers who were already leery about making a home purchase have registered even more pessimism about their buying prospects with the elevation in mortgage rates, according to the latest Fannie Mae Home Purchase Sentiment Index.

“Mortgage rates persistently over 7% appear to be deepening the malaise consumers feel about the home purchase market,” said Doug Duncan, senior vice president and chief economist. “In fact, high mortgages rates surpassed high home prices as the top reason why consumers think it’s a bad time to buy a home, a survey first.

“Consumers are not seeing much affordability relief in sight,” he said, citing concerns voiced over rising home prices, lower income and reduced job security. “In our view, all of this points to home purchase affordability remaining a problem for the foreseeable future, which we forecast will keep home sales sluggish into next year.”

Five of the six indicators decreased month over month, including those used to measure home buying and home selling conditions. In September, just 16% of consumers said it was a good time to buy a home, which matched the all-time survey low set in 2022.

Those saying it was a good time to sell also fell by three percentage points to 63%. Meanwhile, only 17% expect mortgage rates will go down within the next 12 months.

The total index for September was 64.5, down 2.4 points, but ahead of the same period last year by 3.7 points.

Among the other components measured, 42% said home prices will go up in the next 12 months, a one percentage point increase, while those saying prices will decrease fell to 23% from 26%.

Concerns about job loss rose slightly to 23% from 22%, with 75% still saying they aren’t concerned about losing their job in the next 12 months. The survey also found fewer people saying their household income rose significantly (down to 18% from 22%), with those saying it fell significantly up to 13% from 12% previously.

See also:

• Listening to a 20-something on furniture, housing and more | Jerry Epperson
• Potential home buyers have low expectations amid supply issues, high mortgage rates

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NEW YORK — The two youngest demographic groups are making their shopping lists for home-related items.

The YPulse “Shopping for the Home Report” shows both Gen Zers (those ages 13 to 22) and Millennials (23- to 39-year-olds) are looking to spruce up their surroundings, whether they are renters, owners or still living at home.

When asked what they planned to buy for their homes and spaces in the coming year, Millennials called out electronics (42%), bed and bath supplies (40%), kitchen items (40%) indoor furniture (36%) and décor and pillows (35%) as their top items. Also in the mix are rugs (33%), appliances (33%) and organizational items (28%).

For Gen Z, décor and pillows (35%) were No. 1, ahead of electronics at 33%. Other highly ranked home-related priorities were bed and bath (31%), kitchen items (28%) and organizational items (27%). However, one-fourth of Gen Z said they would be looking to buy indoor furniture as well, with rugs (23%) and lighting (23%) not far behind.

Outdoor furniture is a bigger must-have among Millennials (25%) than Gen Z (15%). The same is true of supplies for renovating spaces, with 25% of Millennials citing this vs. just 14% of Gen Z.

Both generational groups are also quite resolute about their style. YPulse reported that about 70% of young consumers agreed they have a specific decorating style.

When presented with competing design choices, both groups identified themselves as preferring minimalist vs. maximalist, orderly vs. cluttered, earth tones vs. bright colors, modern vs. vintage, and wanting a place to relax vs. having a place to entertain.

The preference was strongest on the cluttered vs. orderly choice, with 86% of Millennials and 82% of Gen Z opting for an “in order” look. Gen Z tends to be a bit more maximalist than Millennials (38% vs. 34%) and slightly more modern (69% vs. 66%). Millennials, meanwhile, showed a moderately greater interest in having a place to relax (78% vs. 75%).

See also:

• Why Gen Z could be a bright spot for the sagging home category
• A milestone reached as Millennials cross the home ownership threshold: Where are they buying?

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