Key Takeaways
- U.S. consumers expect to spend an average of $783 this holiday season, up 5% from last year, with self-gifting rising 18% to an average of $354, according to KPMG.
- Shoppers are turning to AI to find value, with 37% planning to compare prices across retailers and 33% planning to search for discounts or promotions.
A new consumer pulse survey released this morning by KPMG LLP Shoppers expects U.S. consumers to spend an average of $783 this season, up 5% from last year.
The Oct. 21 survey from the U.S. audit, tax, and advisory firm found over half of consumers plan to purchase gifts for themselves during the holiday season for the fourth consecutive year. Self-spending is expected to reach an average of $354, up 18% from what consumers report spending on themselves last year, as 57% percent of consumers plan to shop for themselves this holiday season.
Among “self-gifters,” 67% cite treating or rewarding themselves as a primary motivation and more than half say holiday sales and promotions are driving self-purchases.
Why Is Self-Gifting Becoming a Lasting Part of Holiday Spending?
Self-gifting has become a durable part of holiday spending behavior, said Julia Wilson, KPMG U.S. Principal, Consumer & Retail Strategy.
“Even as households remain mindful of budgets, many are setting aside spending for purchases that feel rewarding, practical, or personally meaningful,” said Wilson in a statement. “Retailers that can connect with those motivations and clearly communicate value will be best positioned to capture this demand.”
How Are Shoppers Using AI to Stretch Holiday Budgets?
The survey found shoppers are putting AI to work to uncover savings, compare prices, and stretch their budgets further. Forty-five percent of consumers plan to spend more on gifts this season, while many are leveraging AI tools to find savings and maximize purchasing power.
And 37% of consumers plan to use AI to compare prices across retailers and 33% plan to use AI to find discounts or promotions.
“AI has made consumers better equipped than ever to make informed decisions about where and how they spend, using these tools to compare prices, uncover promotions, and evaluate products before making a purchase,” said Duleep Rodrigo, KPMG Americas Sector Leader, Consumer, Retail & Hospitality. “The companies that will succeed this holiday season will be the ones using data and analytics to differentiate where consumers will accept higher prices, where brand perception is strongest, and where protecting volume matters most through promotions.”
Holiday Travel Spending Rises 8% as Consumers Book Longer, Premium Trips
The survey found that respondents are not trading down when it comes to travel this holiday season, opting for longer stays and more premium experiences. Expected to spend just under $800 on holiday travel this year, up 8% from a year ago, early half of households earning more than $200,000 plan to spend more than $1,000 on holiday travel with 47% of consumers increasing travel spending cite longer trip durations as the primary driver and a third point to plans to stay in luxury hotels and resorts.
“Many are…choosing longer vacations and premium accommodations that feel special and memorable,” said Braden Mark, KPMG U.S. Principal, Travel, Leisure & Hospitality. “The opportunity for the entire travel eco-system is to demonstrate why a specific experience deserves a larger share of consumers’ discretionary spending rather than simply competing on price.”
Why Are Debit Cards Replacing Credit Cards as the Top Holiday Payment Method?
The increase in spending comes as consumers adapt how they shop and how they pay, As borrowing costs remain elevated, consumers are shifting away from credit cards – the preferred payment method in last year’s survey. Debit cards now lead as consumers’ preferred payment method (73%, up from 65% last year), while nearly one in four buy-now-pay-later users expect it to fund more than 21% of their holiday purchases.
“Consumers are entering the holiday season determined to spend, but they’re also determined to get the most value from every dollar,” said Rodrigo. “They’re spending more on gifts, booking experiences, and treating themselves, while increasingly using AI to compare prices and find the best deals.”
“For retailers, success will come from delivering a compelling combination of relevance, convenience, and clear value rather than simply competing on price.”
