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Dive Brief:
Gen Z shoppers are cutting back their spending to afford their holiday gifts this year, with 33% planning on reducing apparel purchases, according to a PwC survey released Monday.
Gen Zers are slashing their spending on gifts by 30%, a far greater proportion than millennials, who plan to cut spending by 9%. Despite millennials trimming their gifting budgets to $921, the cohort will outspend their baby boomer ($671), Gen X ($705), and Gen Z ($586) counterparts, PwC found.
Most Gen Zers, 61%, prefer to discover new products in stores, but 43% are turning to social media for gift ideas, the survey found. Nearly 40% of Gen Z shoppers are heading to stores this holiday season to find promotions on products.
Dive Insight:
As Gen Z prepares to pull back their holiday spending, PwC’s survey indicates that the generation is looking for deals. Nearly 80% Gen Z shoppers wait for items to go on sale before buying them and only 21% regularly pay full price for a product, the survey found. The share of Gen Zers looking for discount codes has increased 14%.
Gen Z shoppers expect to cut their overall holiday spending by nearly a quarter this year, a dramatic shift compared to last year when they planned to spend 37% more than the year prior, according to a September report from PwC.
The generation’s spending pullback could send total holiday sales down 5% year over year, per PwC.
Other research similarly anticipates muted holiday sales this year. In November and December, retail sales are predicted to grow 4% from a year earlier to exceed $975 billion, according to a Bain & Company report. The projection is a lower growth rate than the 10-year average of 5.2%, the report noted.