Consumers are expected to spend 51% of their gift-buying budget online in 2017, compared to 42% for store spending, the first time this balance has been tipped, according to an annual report from Deloitte. The two categories were evenly split in 2016.
Holiday online gift-buying sales are expected to top $110 billion this year, which Deloitte defines as the period from November through January. Overall holiday retail sales are projected to top $1 trillion this year, a 4% to 4.5% gain over 2016.
According to Deloitte, almost 80% of consumers expect to spend the same or more this holiday season, purchasing an average of nearly 15 gifts each. This figure has remained relatively flat since 2011, with clothing and gift cards the two top categories at 49%. Half of consumers shop for themselves while shopping for others.
The internet and mass merchant sellers remain the top shopping destinations, with online widening the lead over other formats.
Most consumers are expected to complete their shopping after Thanksgiving, Deloitte found. Twelve percent are buying for the next 2018 season, 16% are buying for both seasons, 35% are buying for the 2017 season and nearly 40% of after Christmas shoppers are neither taking advantage of after holidays sales for non-holiday items.
The report revealed that online outperforms in-store along critical customer satisfaction dimensions of search and product quality and variety. The vast majority of customers (83%) will use a desktop/laptop during the shopping journey, and the probability of converting a desktop/laptop shopper to a purchaser is 75%. Also the propensity to shop via a smartphone is up. Deloitte found the probability of converting a smartphone shopper into a purchaser is 59% in 2017, compared to 43% in 2016.
Deloitte found that three quarters of shoppers plan to take advantage of free shipping offers. In line with other research, almost 90% of consumers consider free shipping more important than fast shipping.
However there are still high expectations around shipping speed, with shoppers expressing low willingness to pay for even expedited shipping. Deloitte found that the highest number of consumers (45%) of consumers expect delivery within two days, with 35% expecting it within three to four days. When it comes to the fastest methods, despite all the hype just 7% said they expect next-day delivery and only 2% expect same-day delivery, Deloitte found. Forty-three percent of shoppers said they plan to take advantage of in-store pickup options this holiday season, based on cost savings and convenience, especially when shopping for home and kitchen goods electronics and clothing. A little less than half of respondents (44%) said they expect merchants to offer them a flexible return policy.