For the holidays, boomers will splurge on the grandkids. Many younger consumers will just splurge.
This holiday weekend, more than 180 million people are expected to shop either in store or online, according to the National Retail Federation.
The trade association said that’s almost 16 million more shoppers than last year. For retailers, the big questions are who is spending — and on what?
Baby boomers control about half the wealth in this economy, so it makes sense that, when it comes to holiday spending, “you’re gonna see boomers using their buying power to really provide experiences not just for themselves, but for the younger generation,” said Greg Portell, a lead partner at the consulting firm Kearney.
“So you’re gonna see a lot of family gifting a lot of family experiences, which should both expand the holiday shopping season but also add a little depth to people’s holiday experience,” he said.
At the same time, older shoppers may feel a bit more sticker shock than others.
Older people “spent a lot more time looking at lower prices throughout their lives,” said Lars Perner, a boomer himself, who teaches clinical marketing at the University of Southern California’s Marshall School of Business. “Inflation is likely to be more unnerving and a disincentive to buying.”
For other groups, accepting higher prices isn’t as big a challenge as paying them.
“Some of the biggest spenders on gifts are millennials and Gen Z, and they’re the biggest entertainers. And they have college loans to repay that kicked in in October, so the timing is dreadful for the holiday season,” said Candace Corlett, president of WSL Strategic Retail.
So, during the holiday shopping season that just kicked off, according to McKinsey and Co., some shoppers will trade down for fewer or less expensive goods and services, while others will go in the opposite direction.
“Especially among younger high-income consumers, we see that a lot of them want to splurge as well,” said Tamara Charm, a partner at McKinsey. “‘It’s been a really tough couple of years, and I want something that feels more immediate and something that’s going to make me feel good in the moment.'”
Even if it may be tough to pay for later.