What will consumers’ shopping behavior look like for the 2024 holidays?

Consumers are gravitating toward online retailers that make personalized offers with deals and discounts, bolstered by free shipping and easy access to customer reviews.

Sandra Levy

3/20/2024

Consumers remain extremely concerned about inflation and the higher prices of products and services, with many gravitating to online retailers that make personalized offers with the best deals and discounts, bolstered by free shipping and easy access to customer reviews. This finding comes from a survey conducted in February by Celigo.

The survey, which received more than 1,500 responses from U.S. and U.K. consumers, also asked about their online shopping preferences, habits and plans for 2024.

Survey respondents answered questions about their 2023 holiday shopping experience and how that will shape their 2024 purchasing plans. They also were asked about the most important qualities they seek from online retailers, how they research and buy products online and their shopping expectations moving forward.

Generation Z—which will soon emerge as the most dominant online shopping demographic— expects lower prices and free on-time shipping with every interaction, so it behooves online retailers to deliver flawless customer experiences in those areas to drive greater loyalty with younger shoppers, Celigo said.

The majority of those polled also had multiple poor online retail shopping incidents last year, although holiday 2023 seemed to be a highlight, with many respondents reporting positive seamless experiences. Yet, shoppers are still frustrated by higher prices, delayed deliveries and excessive shipping costs, Celigo said.

Shoppers will continue to rely on online retailers for the fastest, most convenient and cost-effective shopping experience that gives them access to a wide variety of highly desired products, but many still enjoy in-person shopping at brick-and-mortar stores. In fact, nearly 60% of all U.S. and U.K. respondents plan to attend Black Friday and Cyber Monday physical events during the holiday 2024 season.

As online retailers prepare for upcoming shopping events this spring and summer—including Mother’s Day, Easter and summer vacation—they must improve e-commerce operations, back-office integration and omnichannel selling strategies before the busy holiday 2024 season begins.

This includes investing in new technologies and approaches that improve the criteria most important to shoppers, such as free guaranteed on-time shipping, personalized deals and product discounts. Given the continued interest in brick-and-mortar shopping, online retailers must focus on improving their omnichannel presence to grow market share and boost consumer loyalty.

Key findings:

According to the survey, 88% of U.S. shoppers and 79% of U.K. shoppers said that online retailers failed to meet expectations at least 1-3 times in the past year. When asked about the top three most important qualities they seek in an online retailer, 59% of U.S. and 58% of U.K. respondents cited lower prices while others named free shipping (53% U.S. and 46% U.K.) and fast shipping (33% U.S. and 44% U.K.) Access to a wide variety of product choices was important to 36% of U.S. and 38% of U.K. shoppers.

Respondents also cited the frustrations that would make them stop purchasing with an online retailer. Receiving products that do not accurately match the descriptions of what they ordered was the No. 1 reason (39% U.S. and 34% U.K.) that would cease the buying relationship. Excessive shipping costs (38% U.S. and 33% U.K.), late product deliveries (32% U.S. and 31% U.K.), poor product quality (28% for both U.S. and U.K.) and poor customer service (26% U.S. and 25% U.K.) also were reasons for jettisoning online retail sites.

Younger shoppers reported higher rates of dissatisfaction with online shopping across both regions. In the U.K., 52% of baby boomers said online retailers were flawless in delivering on their expectations in the past year while 85% of Gen Z said retailers failed them at least 1-3 times. Interestingly enough, 34% of baby boomers said they buy their products in physical retail stores while less than 8% of Gen Z made their purchases in-person. In the U.S. a whopping 27% of respondents over 60 have never had a bad online retail experience while 46% of boomers, 42% of millennials and 49% of Gen Z have had poor online buying experiences 1-3 times per year. The volume of online purchases, coupled with expectations of a generation that was born in the post-internet era, likely contributed to the outsized variance. However, retailers must account for the needs and perceptions of the demographic that will drive sales for the years to come. In fact, new research from Oxford Economics found that Gen Z’s purchasing power will reach $2 trillion within less than 10 years.

With economic conditions remaining somewhat shaky, U.S. and U.K. shoppers remain highly price conscious and flock to where they can find the best deals and discounts, whether it is with online retailers, omnichannel retailers, physical stores or marketplaces. 42% of U.S. and 44% of U.K. respondents stated that inflation and higher prices have caused them to shop less online because they need to tighten their budgets. On the bright side, 31% of all respondents said that inflation has caused them to shop more online because they find better deals there.

Both U.S. and U.K. shoppers are expected to remain more value-conscious throughout the balance of 2024; therefore, online retailers should make more personalized offers with desirable deals and price discounts.

Online retailers must continue to meet shoppers where they research and buy products most often. Both U.S. and U.K. shoppers do the majority of their product research via Google searches or on marketplaces like Amazon and eBay. Furthermore, shoppers across both geographies do most of their online shopping on brand websites, marketplaces and physical brick-and-mortar stores. Key findings from the survey uncovered where shoppers do the research for the products they buy both online and offline:

Search engines like Google (57% U.S. and 67% U.K.)
Marketplaces such as Amazon and eBay (57% U.S. and 55% U.K.)
Social media (33% U.S. and 38% U.K.)
Browsing in physical retail stores (32% for both U.S. and U.K.)
Word of mouth and through friends (33% U.S. and 31% U.K.)
TikTok (25% U.S. and 23% U.K.)

The survey also revealed that brand websites and Marketplaces are the primary places where people actually purchase the products they buy:

Brand websites (26% U.S. and 40% U.K.)
Marketplaces (26% U.S. and 21% U.K.)
Physical retail stores (16% U.S. and 12% U.K.)
Search engines (13% U.S. and 16% U.K.)
Social media (11% U.S. and 8% U.K.)

Both U.S. and U.K. shoppers do careful research before buying, often relying on comparisons to get the best deals and discounts. The availability of both on-site and third-party product reviews is key for shoppers, influencing their decisions about whether or not to make a purchase. Furthermore, access to both on-site and third-party product reviews are very influential with shoppers. Survey respondents rely on these primary vehicles to research products before making buying decisions:

Product reviews on the online retailers’ website (60% U.S. and 65% U.K.)
Third-party review sites (41% U.S. and 30% U.K.)
Being able to physically see or experience the product before purchase (31% U.S. and 25% U.K.)
Word of mouth recommendations (29% U.S. and 28% U.K.)
Virtual/chat assistance (17% U.S. and 11% U.K.)

When asked what drives their online buying behavior, survey respondents revealed that they:

Spend time researching a product to compare pricing options from multiple retailers (35% U.S. and 38% U.K.)
Use online Marketplaces like Amazon or eBay to get the best value (22% U.S. and 20% U.K.)
Go directly to the websites they trust to complete purchases (19% U.S. and 22% U.K.)
Prefer to visit physical retail stores before buying a product online (14% U.S. and 12% U.K.)

There are several upcoming shopping events this spring and summer—including Mother’s Day, Father’s Day, graduations, summer vacation and back-to-school—that provide ripe opportunities for online retailers to boost sales, market share and consumer loyalty. Nearly half of all survey respondents said that they will do Mother’s Day shopping online while more than 40% stated the same for Father’s Day. This compressed timeline should give retailers a sense of urgency as two non-traditional peak shopping events are rapidly approaching.

Survey respondents stated that they will online shop during these upcoming special occasions, events and holidays this spring and summer:

Mother’s Day (46% U.S. and 50% U.K.)
Father’s Day (40% U.S. and 37% U.K.)
Summer Vacation (37% U.S. and 42% U.K.)
Back-to-School (25% U.S. and 19% U.K.)
Graduations (22% U.S. and 10% U.K.)
Easter (21% U.S. and 37% U.K.)
Tax-free Weekends (21% U.S. and 10% U.K.)
Spring Bank Holidays (9% U.S. and 18% U.K.)

Holiday 2024 will not officially begin until the late fall timeframe, but many consumers are already planning to shop more online this season. Of those that plan to spend more money online during Holiday 2024, 52% of U.S. and 49% of U.K. respondents stated that online shopping is a more convenient way to find and purchase gifts. There also were other key reasons why they favored online as their preferred Holiday shopping vehicle:

Greater access to more product choices (48% U.S. and 36% U.K.)
Lower prices than in-store shopping at retail stores (34% U.S. and 40% U.K.)
Easier to find specific products than in-store shopping (22% U.S. and 19% U.K.)

Roughly 30% of all respondents will spend more on online holiday shopping for 2024 than in 2023, while 40% of U.S. and 32% of U.K. shoppers will spend the same amount this year as they did last year.

This trend bodes well for online retailers but they still must pay careful attention to meeting the most important criteria that consumers have for their online shopping experience. Online shoppers on both sides of the pond increasingly demand the following attributes:

Free Shipping (65% U.S. and 59% U.K.)
Product Reviews (63% U.S. and 60% U.K.)
Return Policies (49% U.S. and 33% U.K.)
Visibility Into Shipping Dates (42% U.S. and 35% U.K.)
Fast Shipping (40% U.S. and 45% U.K.)
Free Returns (39% U.S. and 28% U.K.)
Payment Options (36% U.S. and 46% U.K.)
Pick Up In-Store Options (16% U.S. and 17% U.K.)

While shoppers increasingly gravitate online, many still prefer a good old-fashioned in-store brick-and-mortar shopping experience. Over 50% of all respondents will attend Black Friday and Cyber Monday events during the holiday 2024 season.

Attending Black Friday and Cyber Monday in-person holiday shopping events have the greatest appeal for younger demographics, particularly Gen X, millennials and Gen Z. In the U.K., 30% of baby boomers said they would attend Black Friday and/or Cyber Monday in person, yet more than 50% of Gen X, 61% of millennials and 67% of Gen Z respondents intend on experiencing the holiday shopping extravaganza in brick-and-mortar establishments. While the elder generation may be content on avoiding door busting sales and long lines, those who missed out on their opportunity to experience the excitement of an in-store Black Friday sale during pandemic-era restrictions are eager to see what it is all about.

In the U.S., 55% of millennials, 53% of baby boomers and 51% of Gen Z plan to attend Black Friday and Cyber Monday in-person events at retail stores while only 32% of respondents over the age of 60 plan to do so. Yet, when it comes to purchasing products regularly and doing non-holiday shopping at physical stores, seniors are the most frequent brick-and-mortar shoppers (27%) versus 7% for millennials and 19% for boomers.

While every demographic across the U.K. and the U.S. spends time researching the best product and personalized deal opportunity before making their purchase, the shift from traditional methods is well underway. While U.K. baby boomers and Gen X conduct their research primarily on search engines, marketplaces and in physical stores, millennials and Gen Z sought out information on social media in much greater numbers. 93% of U.K. Gen Z respondents said they research products on social media, including 43% turning to TikTok as their primary means of insight. 75% of millennials leverage search engines for product information, but 62% open their preferred social media app before using Google or a marketplace.

In the U.S., nearly 40% of Gen Z rely on social media and TikTok for product research with 58% of them still relying on Google and search engines for product and price information gathering. Search engines and Google still reign supreme as the primary vehicle for U.S. baby boomers (60%), millennials (54%) and those over 60 (63%).

Advice for online retailers:

To boost sales and consumer loyalty and win holiday 2024, online retailers should invest in new technologies and approaches that will deliver the most important criteria for consumers: free, guaranteed on-time shipping, personalized offers with product deals and discounts, and easy access to on-site and third-party product reviews. Here are five strategies they must embrace:

Drive Omnichannel 24/7

Focus on creating an optimal omnichannel experience. Different shopping demographics research and buy products in a variety of ways; therefore, retailers must have a consistent and connected experience across ALL channels.
Integrate your own channels with any third-party channels you're selling through, such as Etsy, Amazon or Wayfair to ensure pricing is consistent across all channels. It’s easy to get this wrong, causing marketplaces to cannibalize your direct business while alienating clients from shopping directly with your brand.
Create a consistent experience both in marketplaces and your owned brand properties, including brick and mortar. The only way to do that is to have connected back-end operations. Having a seamless connection between your in-store POS, inventory and other systems to your online sales and service channels is key here. This can ensure an engagement happening in store can be easily continued online and vice versa. For example, retailers can easily identify which nearby stores hold stock of a product a customer was looking at online and direct them to the store to either experience the product or complete the purchase.
Implement a solid direct-to-consumer strategy, giving consumers a differentiated online experience as well as the level of user experience and user interface that they have come to expect from top marketplaces. This is especially important as shoppers rely heavily on brand websites for both researching and purchasing products.

Extend Operational Efficiencies

Create efficiencies in all aspects of the buying process through automation. By integrating both front and backend operations, retailers can easily provide fast (and possibly free) shipping, the correct in stock products, pricing consistencies across all channels and better personalized deals and discounts to shoppers.
As supply chains are becoming more volatile, having a direct integration with your 3PL and warehouses becomes crucial for aligning customer expectations and getting the best prices. By having this connection, retailers can provide more accurate shipping dates and prices. They also can automatically identify the fastest or cheapest shipping options to reduce shipping costs and transfer this savings to shoppers. Retailers should better use physical locations as shipping hubs, offering shoppers free delivery for picking up at a location close to them. Connect to product review sites and integrate with product review tools and sites such as Yotpo, Yelp or Trustpilot to aggregate reviews from multiple locations and show them on brand websites, thus leveraging reviews from across the web to create trust with shoppers.
Align Product Information Management systems (PIM) with Product description pages on websites and listings on marketplaces to ensure shoppers get the products they expect and offer bundles that will maximize the value of each shopping interaction.
Consider using AI to help keep systems running with minimal intervention, drive personalized offers and assist with customer support initiatives.

Get Personal

Leverage integration to get valuable data on consumer purchasing habits. By connecting all systems, retailers can see items that are frequently purchased or frequently returned by a customer and can then show offers that are most likely to be purchased based on past behavior.
Go further: feed all of that valuable buying data to Customer Data Platforms like Twillio Segment or Optimove and develop curated customer journeys or promotions to fit specific client sub-segments or niches. For example, offering a special promotion to brand fans or improving repurchase emails (e.g. using data to prompt re-purchase email with a special offer when a product a shopper purchased is likely to run out).

Serve Gen Z

Give some dedicated attention to the generation that will reach $2 trillion in purchasing power in less than 10 years.
Because Gen Z relies heavily on social media for product research, retailers must ensure that product information on their social sites is also accurately reflected on other channels.
Leverage user generated content from social media on your own website to build trust or create a seamless journey from discovering a product on TikTok (for instance) to seeing it in display ads and finding it on your online store.

Plan Holiday 2024

Start the integration and planning process now. Having siloed systems prevents retailers from delivering outstanding customer service; fixing these issues should be a top priority this spring.
Ensure that e-commerce systems can handle spokes in order volume. Stress test new integrations to avoid logistical issues well before the holiday shopping season begins- often as early as October.
Evaluate all channels this Spring to ensure that the shopping journey is seamless across all touchpoints from initial research on Google, search engines, Marketplaces and third-party reviews to the brand websites where most of the purchasing is completed.

The Power of iPaaS for Retailers

Investing in the right iPaaS system can help online retailers manage order volume spikes without downtime, enable streamlined error management, automate returns management and provide a connected customer experience across all channels.

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