Peering into Santa’s shopping list

We preview consumers’ online holiday shopping plans, free shipping expectations, and top product categories

This year, as peak approaches, conflicting economic indicators—including increasing wages, slowing core inflation, a cooling labor market, and student loan repayments resuming—have retailers scratching their heads and wondering what to expect from consumers this holiday season.

We brought these questions to consumers and found several silver linings—as well as a few cost-savings opportunities—for retailers.

Increased online shopping

Key takeaways:

  • This holiday season, more than a third of consumers plan to shop online more than last year, about half plan to shop about the same amount, and less than a quarter plan to shop less—roughly the same breakdown we saw last year.
  • However, this year saw a significant shift in the primary reasoning among those planning to shop online less. The proportion of those who cited cutting back on their overall spending fell 14% year-over-year, with those shoppers moving to the “I prefer to shop in-store” camp. The shift is even more pronounced among younger shoppers: 22% among GenZ and 18% among Millennials.
  • These responses track with what we’ve already seen in the market this year: Online spending that appears to defy gravity. Consumers are spending more on goods versus 2022, even after accounting for inflation (spending on services, already elevated, is flat year-over-year). Online sales are up more than 7% versus 2022, even though online prices have been on a deflationary trend. This trend, however, may not be mirrored in parcel volumes for two reasons:
    • Large retailers are incentivizing (and suburban consumers especially are adopting) buy-online-pickup-in-store (BOPIS) transactions.
    • Higher free shipping thresholds are driving consumers to make fewer purchases with larger basket sizes, resulting in fewer parcels shipped.

More difficulty qualifying for free shipping

Key takeaways:

  • Many online shoppers are already primed for higher-than-last year free shipping thresholds. As shipping costs rise, several enterprise ecommerce brands have raised the required purchase amount to qualify for free shipping in recent months—and more than a third of consumers have noticed. Therefore, it’s no surprise that 42% of consumers already expect it will become harder to qualify for free shipping this holiday season than last year.
  • Presented with a hypothetical online order that doesn’t meet the minimum spend required for free shipping, consumers are most likely to either add more items to cart to qualify for free shipping (44%) or try to find the same item with a different online brand that will offer free shipping (37%).
  • Our take? The enterprise retailers whose shipping costs are going up the most (and therefore raising their thresholds the most) are doing so because 1) they can get away with it, and 2) these multi-brand retailers compete on customer experience (i.e., fast shipping) more so than the products themselves, forcing them to focus on fast (read: more expensive than standard ground) shipping.
  • Brands that sell unique products that consumers can’t easily buy elsewhere can likely save some margin by testing the following options:
    • Increase the free shipping threshold at checkout—the one-third of customers who say they would look for a similar product elsewhere will be unsuccessful.
    • Consider subsidizing slower shipping options to save on transportation costs—especially from October to early December when consumers aren’t yet at risk of missing a holiday gifting occasion.


42% of consumers already expect it will become harder to qualify for free shipping this holiday season than last year.

Trading down on brands

Key takeaways:

  • At this point in the season, the top categories shoppers plan to buy online for holidays are apparel, electronics, toys, media/entertainment, and beauty.
  • In addition to BOXpoll survey data, we looked at Q2 earnings and our clients to forecast consumers holiday behavior:
    • Retailer earnings show that consumers are “trading down” on brands as they seek lower prices. Walmart and TJX reported stellar quarterly results, at the expense of Target and higher-end department stores.
    • Among our clients, we are seeing similarly divergent forecasts based on category. Mid-price apparel, as well as accessories and beauty brands, are optimistic; sporting goods and home décor brands (who sit at the bottom of shoppers’ online lists) are approaching peak more cautiously. However, it’s important to note that this early in the season, consumers likely don’t have a firm grasp on what they need to buy for everyone on their list. As we move into autumn, consumers will spend more time solidifying their holiday shopping lists.

Given the challenging macro environment for shippers, online brands differentiating on unique products have several opportunities to save money this peak, including testing more non-day-definite shipping options and higher free shipping thresholds, without costing consumer expectations.

BOXpollTM by Pitney Bowes, a weekly consumer survey on current events, culture, and ecommerce logistics. Conducted by Pitney Bowes with Morning Consult // 2200 US consumers surveyed August 2023. © Copyright Pitney Bowes Inc.

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