As the 2024 holiday season approaches, Gen Z and Millennials are putting their spin on festive celebrations, blending nostalgia with modern twists and focusing on experiences over material goods. A plethora of multi-year trend data is available for analysis according to Simon-Kucher's sixth annual Holiday Shopping Report, which draws on consumer behavior over the previous five years as influenced by the world in which those consumers lived at the time.
Spending Trends: Youth Leads the Way
Younger generations seem to be unaffected by the current economy and are ready to ramp up their holiday spending. Although they face the same economic challenges as the rest of us, they appear to be setting their sights high for the 2024 holiday season. They aren't just going to match what they spent last year; they're going to beat it by an impressive margin—21 percent more, to be exact, for Gen Z and 15 percent more for Millennials. The amounts that both groups plan to spend in 2023 are far more significant than what either group has spent during any previous holiday season.
Embracing Traditions with a Modern Twist
Although the perception may be that younger generations are moving away from traditions, survey data tells us something different. Three out of four members of Gen Z and Millennials either uphold childhood traditions or work to develop new ones. These same groups also search for the inspiration to create the aforementioned new traditions on social media in a big way. And what popular activity fills the evenings of young adults during the holiday season? Cuddling up and watching holiday movies, of course! Cooking and baking (or some variation thereof) is another key activity. This may or may not come as a surprise, but 59 percent of young adults stated they partake in the act of watching holiday movies, with that number increasing among those who have Christmas trees in their homes.
Experience-Driven Celebrations
This year's trends show the shift towards valuing experiences over material goods. Deloitte reports that spending on experiences is expected to increase by 16 percent, while gift spending remains relatively flat. Millennials are leading this charge, planning to allocate 20 percent of their holiday budget to entertainment. They're also more likely to give and receive experience-based gifts like excursions or classes, reflecting a broader trend towards creating memories rather than accumulating possessions.
Sustainable and DIY Approach
Environmental consciousness significantly influences how Gen Z and Millennials approach the holidays. A notable 58 percent prefer DIY gifts and decorations, while 56% plan to give homemade baked goods as gifts. This trend speaks to a desire for personalization and aligns with growing concerns about sustainability and overconsumption. Gen Z and Millennials also lead the way in sustainable shopping practices, opting for eco-friendly products and supporting brands with strong environmental commitments.
Digital Integration and Social Media
For these generations, the holiday season is deeply intertwined with technology. Approximately 26 percent of Gen Z and 20 percent of Millennials will purchase holiday gifts directly from social media sites. Many use these platforms for gift inspiration and to document their celebrations, creating a digital scrapbook of their holiday experiences.
Spending Habits and Payment Methods
Younger consumers are adopting diverse payment methods to fund their holiday spending. Gen Z and Millennials are two to four times more likely than older generations to use "buy now, pay later" services, take out loans, or borrow money for holiday purchases. This trend reflects both their comfort with new financial technologies and the economic pressures they face.
Retail Strategies Adapting
Retailers are adjusting their strategies to cater to these evolving preferences. There's an increased focus on experiential shopping to attract Gen Z customers, with stores creating immersive environments and interactive displays. Digital engagement and social media marketing have become crucial, with brands leveraging influencer partnerships and user-generated content. Strategic promotions and discounts are being tailored to appeal to value-conscious shoppers, recognizing the economic constraints many young consumers face. As the holiday season unfolds, it's clear that Gen Z and Millennials are reshaping celebrations to align with their values of experience, sustainability, and digital connectivity. While they still cherish many traditional aspects of the season, they're not afraid to create new customs that reflect their generation's unique perspective on the world. This evolution of Christmas traditions could shape this festive season.