Concert tickets in your stocking and a travel itinerary under the tree? No way: It's 2020, and stuff is back in style.
While spending on experiences was the rage in recent years — sparking a number of retailers to rethink their central business strategies — COVID-19 has disrupted the trend, data from Deloitte's holiday survey confirms.
Average U.S. household spending this holiday season is expected to decrease 7% from 2019, with a sharp 34% drop in travel spending accounting for most of the decrease, according to Rod Sides, a Deloitte vice chairman. Some of the money normally spent away from home will go toward non-gift purchases, like home furnishings and seasonal decor.
"We're seeing a shift in terms of what people are buying," Sides said. "Folks are focused on the home and a little more decorating. Destination travel isn't there like it has been in the past."
A season-long move away from experiences is good news for companies like Bed Bath & Beyond Inc., which reported a sales rebound this summer as consumers stocked up on items for their homes. It could even give a boost to recent retail laggards, like Gap Inc. and Marshalls-owner TJX Cos., which have had more trouble luring in homebound customers who are are replacing wardrobes far less frequently this year.
The shift was already apparent in September retail sales released last Friday, which rose at the fastest pace in three months. The broad-based gain likely reflects consumers tapping savings and funds from temporary extra jobless benefits, plus delayed back-to-school shopping.
"With less spending on personal services such as travel and entertainment outside the home, some of that money is shifting to retail cash registers," chief economist at the National Retail Federation, Jack Kleinhenz, said in a statement.
Rebecca Shaw, a 25-year-old social media manager in Philadelphia, is one shopper having to rethink her holiday spending plans. She normally loves gifting family members experiences for Christmas, like indoor skydiving vouchers or sporting event tickets. But with the coronavirus still spreading, she's now considering Visa gift cards or paying several months of subscription boxes as Christmas presents.
"Material things can go missing, but memories can be there forever," said Shaw. "I'd rather make memories doing something like painting with a twist or going to a museum instead of buying a T-shirt that may not fit or something that can expire."
