Dive Brief:

• In 2017, 83% of consumers will spend approximately $1,189 each, a 6% increase over 2016 activity, the PwC 2017 Holiday Outlook survey reports. The increase is attributed to rising employment, as the average household income is now approximately $59,039.
• As for shopping habits, roughly 28% of shoppers rely on online options only, a 10% increase from 2016. 88% of consumers will shop in stores, while 84% will use both options.
• The report also found that consumers value free shipping highly, especially among millennials, 40% of which consistently seek it out.

Dive Insight:

Free shipping remains a priority among consumers, though its degree of importance varies slightly by generation.

Though only 24% of 100 retailers believe that free shipping is their most important delivery offer, consumers are consistently choosing those who offer that amenity, regardless of the cost to the retailer.

The extension of “free shipping day” by Amazon and the website FreeShippingDay.com both sought to capitalize on that expectation.

While the average income grows and the nation comes close to full employment, some habits die harder than others: namely, the pleasure of getting something for nothing. What shoppers who require free shipping fail to realize is that they pay in different ways, whether through higher prices or annual memberships or even limited customer service, in some cases.

With some same-day deliveries tips are involved, which depending on the area, can top out at 20%, far more than the average shipping or tax rate.

“Shippers and retailers need to recognize that consumers are picky about delivery options, because they told us,” Steve Barr, Consumer Markets Leader at PwC stated in the report. “75% want to see a delivery vehicle identified by logo or a delivery person identified by uniform while 50% want that logo and uniform to reflect a brand they know and trust.”

Issues of keeping free shipping sustainable also matter, since consumers are increasingly demanding the option.

“Everything old is new again as today’s retailers continually fine-tune their delivery models to balance economics with customer service,” Barr said in the report. “Ultimately, two factors prevail: the density of the delivery destination (urban or suburban or rural) and the weight of the package.”