Vaccines, variants, and deja vu
The 2021 holiday shopping and travel outlook
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Vaccines, variants, and deja vu

The 2021 holiday shopping and travel outlook


The 2020 holiday season was anything but ordinary. People spent less, traveled less, and worked more, saving their resources for when things returned to normal.

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But 2021 doesn’t seem to be that year. While rising vaccination rates have eased restrictions in many places, pandemic-related concerns are impacting how people plan to celebrate the holiday season. To better understand these perspectives, the IBM Institute for Business Value (IBV) surveyed more than 13,000 adults in 9 countries (Brazil, Canada, France, Germany, India, Mexico, Spain, the United Kingdom, and the United States).

We found that people’s opinions about COVID continue to vary widely—and these perspectives play a large part in holiday planning. Where people fall on the concern spectrum will define, in part, what they’re planning to spend, where they’re willing to go, and how they will get there.

Work

Income decreased for 44% of the lowest earners and increased for 43% of the highest earners.

Shop

87% of consumers say they will shop for the holidays this year, up from 81% in 2020.

Travel

Every COVID safety measure would lead to a net increase in travel demand.

The concern spectrum

Our survey found that people who stand against public safety measures—while vocal—are in the minority. Most global respondents (56%) fall on the Vigilant end of the concern spectrum and are continuing to make choices from a place of caution.

Indifferent

  • Don’t think anyone should wear masks indoors
  • Aren’t worried about being around unvaccinated people
  • Aren’t comforted by vaccine requirements at shopping centers and other venues
  • Highest portions in US and Germany

Vigilant

  • Strongly support mask mandates
  • Feel more comfortable visiting stores that have contactless shopping options available
  • Highest portions in India, Brazil, Mexico, and Spain
  • 46% say their monthly discretionary spending has improved over the past year

The differences between Vigilant and Indifferent viewpoints have been discussed in-depth over the past 18 months, with businesses and governments trying to balance their COVID responses in a way that respects opinions across the concern spectrum. But the question remains this holiday season: How can companies respond to COVID in a way that is responsible and respectful—and will drive business results?

Another stressful holiday season

As the pandemic lingers, companies have struggled to decide which COVID safety practices to adopt. Social distancing, mask mandates, and vaccination requirements have caused major conflicts, with people on both sides calling for boycotts of businesses that enforce policies they oppose.

The pandemic has also put many people in a difficult financial position. Almost half (49%) of global respondents say their household expenses increased over the last year—but incomes are not keeping pace. Only 22% say their income has increased and 37% say it has declined.

In Brazil, the situation is starkest. 71% of respondents in Brazil say their monthly household expenses have gone up while more than half (52%) say their income has gone down. The largest portion of respondents who saw their income increase live in India (41%), with the US (23%) a distant second. Globally, 44% of respondents in the lowest income bracket saw their monthly incomes decrease, while the largest portion of respondents who saw their incomes increase were in the highest income bracket (43%). In short, the pandemic has intensified economic inequality.

49% of global respondents say their household expenses increased over the last year—but incomes are not keeping pace.

Lingering disruption and hardship have also taken a toll on mental health. In the last year, almost 1 in 3 (29%) adults say their mental health has declined, with younger people struggling most acutely. Nearly 4 in 10 (39%) Gen Z respondents say their mental health has declined in the past year, followed by Millennials (31%), Gen X (28%), and those age 55+ (22%). Nearly 1 in 3 (31%) Gen Z respondents are say their physical health has declined—more than any other age group.

Fewer than
1 in 3 adults

say their physical and mental health
has improved over the past year.

Taken together, safety concerns, mental health challenges, and economic issues are expected to hamper holiday celebrations once again. While people are feeling slightly more festive than in 2020, their plans look largely the same. For instance, only 1 in 3 (32%) say they plan to attend holiday parties this year. This is up from 28% last year—but still half of what we saw prior to the pandemic (64%). Similarly, only 1 in 4 (26%) respondents plan to attend religious services, down from 50% pre-pandemic.

Consumers are shopping early—and online

The supply chain disruptions that started early in the pandemic have not yet subsided—and holiday shoppers see the writing on the wall. To increase their chances of getting everything on their wish lists, more than 1 in 4 (27%) global consumers started shopping in September or earlier. And, compared to last year, twice as many plan to start in October (16%). This means just under half (44%) of consumers plan to jumpstart holiday shopping before November, weeks earlier than the traditional “Black Friday” start date in the US.

While holiday shopping budgets are still 13% lower than they were in 2019, they did increase 30% year over year. The highest budget jumps were in the Middle (+37%) and Mid-High (+35%) income groups, across India (+42%), and among Millennials (+36%). In addition, 87% of consumers say they will shop for the holidays this year, up from 81% in 2020.

44% of consumers plan to jumpstart holiday shopping before November, weeks earlier than “Black Friday” in the US.

Not everyone is planning to head to the mall this holiday season, but most shoppers would like to see a variety of COVID safety measures in place when they do go out. Almost 6 in 10 (58%) global respondents say they feel more comfortable visiting stores that have contactless shopping options available. Half say they feel more comfortable visiting crowded venues if vaccines are required, and a vaccination verification process is in place. And 69% believe all individuals should wear masks in indoor venues regardless of their vaccination status.

Online shopping reigns supreme
Due to lingering concerns about COVID, many shoppers will continue to shop online this holiday season.

While respondents are divided on some safety measures, only 9% say they strongly disagree that everyone should wear masks in public, and just 14% feel strongly that vaccine requirements and verification do not make them more comfortable. When taken in tandem with the fact that nearly half (46%) of Vigilant respondents saw their monthly discretionary spending increase in the last year, this data makes a strong case for merchants to consider COVID safety measures this holiday season.

Online shopping reigns supreme
Due to lingering concerns about COVID, many shoppers will continue to shop online this holiday season.

Holiday travel is on the rebound

Holiday travel was not on the itinerary for many in 2020, as travel restrictions, quarantine requirements, and health concerns kept people closer to home. This year, more people are planning to hit the road—or runway—with 39% of respondents saying they plan to travel to see family and friends over the holidays. This figure is up from 28% last year, but still 36% lower than it was in 2019.

Travel budgets are also on the rebound, up 43% over 2020, with international lodging (48%) and air travel (46%) budgets growing more than budgets for domestic air travel (42%) and lodging (39%). This year, travel accounts for a larger portion of holiday budgets overall, rising to 8.2% from 5.7% in 2020. People in India are spending the largest portion of their holiday budgets on travel (15.7%), while travel is a smaller line item in Canada (4.2%) and the US (4.9%).

More people are planning to hit the road—or runway—with 39% of respondents planning to travel to see family and friends over the holidays.

Last year, the pandemic encouraged people to opt for personal cars over airplane travel, but many are shifting back to pre-pandemic travel patterns. While airplane travel was down 37% from 2019 to 2020, only 21% fewer people plan to travel by plane in 2021 than in 2019. Across almost all countries, respondents say they plan to travel more by airplane this year than last year, with the biggest increases happening in Canada (+65%), Spain (+57%), and Brazil (+48%). Germany is the outlier, with 8% fewer respondents planning to travel via airplane in 2021.

Safety first
The top 3 COVID safety measures respondents say would increase their desire to travel this holiday season:

Roughly the same percentage of Indifferent and Vigilant respondents say they plan to travel to visit friends and family in 2021. But COVID safety measures would be welcomed by large portions of the traveling public this year. This is the equation that businesses across sectors need to consider in the second holiday season celebrated in the shadow of COVID. As leaders weigh the benefits of safety measures against the potential fallout from those who would resist, it’s easy to focus on what they might lose. But a better question may be: what do they have to gain?

Safety first
The top 3 COVID safety measures respondents say would increase their desire to travel this holiday season:

Download the complete 2021 holiday survey for more findings and insights: