New Research Reveals Dramatic Shift in Consumer Spending Habits and Brand Loyalty.
The majority of American consumers (86%) plan to reduce their holiday shopping budgets this year, with nearly half (47%) expecting to cut spending by more than 50% compared to last year, according to new consumer research from RELEX Solutions. This sharp shift in consumer behavior comes at a critical time for retailers, who are already grappling with a compressed shopping season and supply chain uncertainties.
The research reveals a complex landscape where price sensitivity and decreased brand loyalty are reshaping traditional retail dynamics. As consumers actively seek better value and switch between brands more readily, retailers and manufacturers must carefully balance promotional strategies with profitability while maintaining product availability.
Key findings include:
- Brand loyalty is eroding: About 45% of consumers say they’re less likely to remain loyal to brands without meaningful discounts, while 41% will switch brands if faced with both poor deals and out-of-stock products.
- Digital channels dominate deal-seeking behavior: Store and brand apps (60%) and email promotions (60%) are the primary channels for finding deals, while only 32% of consumers primarily search for deals in physical stores.
- Supply chain concerns remain significant: Nearly 85% of shoppers express concern about potential disruptions, with electronics (60%) and clothing/accessories (57%) being the categories of highest concern.
- Age significantly impacts shopping behavior: Consumers from age 45-60 show the highest economic sensitivity, with 60% cutting budgets by more than 50%, while shoppers aged 18-29 prioritize product availability over price.
For retailers and manufacturers, these findings offer crucial insights into a highly competitive environment. Success will hinge on strategic promotions, optimized inventory management, and efficient supply chain operations to capture limited consumer spending while maintaining profit margins.
“Retailers are facing a highly challenging season, with consumers prioritizing value more than ever,” said Madhav Durbha, Group Vice President of CPG and Manufacturing at RELEX Solutions. “To succeed, retailers must not only offer attractive promotions but also ensure those deals don’t erode their margins. At the same time, manufacturers need to optimize their operations and collaborate with retailers to deliver value without sacrificing profitability.”
“This holiday season represents a critical juncture for the retail industry,” Durbha added. “With reduced brand loyalty and a shorter shopping window, there’s no room for error. Retailers and manufacturers need to work together closely, leveraging AI-powered tools to anticipate demand, manage inventory, and run effective promotions.”
Methodology
The RELEX Holiday Shopping Consumer report examines how a shorter holiday shopping period of 27 days in 2024 (five days shorter than 2023), combined with economic volatility and supply chain disruptions, is impacting consumer holiday shopping behaviors. The survey gathered responses from 1,000 U.S. consumers in October 2024.