Dive Brief:
- With inflation still on consumers’ minds, a Forbes Advisor poll conducted by OnePoll found that more than half (51%) of holiday shoppers are planning to purchase fewer gifts for everyone on their list this year in response to inflation concerns. Forty-five percent of shoppers are buying cheaper presents.
- While 76% of the 1,000 shoppers polled are using cash or debit cards to pay for their holiday goods, 20% are using gift cards and 13% are using credit card rewards or cashback. Less than half (42%) of shoppers are using credit cards and 10% will use buy now, pay later loans, per the report.
- Nearly three-quarters of respondents said they will buy traditional physical presents, but 25% are making homemade presents and 21% are gifting experiences.
Dive Insight:
Other reports have pointed to more consumers relying on financing for their purchases. A November PYMNTS report noted that less than a third of Black Friday shoppers used either BNPL, credit cards or loans to pay for their purchases. Plus, another October report from Oracle Retail noted that over seven in 10 respondents to its survey said they would consider paying for their holiday purchases using a store payment plan or financing option.
Additional research found that BNPL platforms are particularly popular among younger consumers. In October, Bluedot released a report indicating that 48% of Gen Z respondents are using installment payment plans to purchase their holiday goods, followed by 47% of millennials and 40% of Gen Xers. Forbes Advisor poll found that while 8% of respondents aged 18 to 25 planned to use BNPL this season, 13% of those 26 to 41 intended to use the service.
So far, this year’s holiday season has brought a sharp increase in buy now, pay later usage. According to a November report from Adobe Analytics, BNPL orders jumped by 85% between Thanksgiving and Cyber Monday compared to the week prior and revenue from those orders saw an 88% spike. Afterpay also saw transactions skyrocket by 120% between Black Friday and Cyber Monday compared to before the holiday.
However, experts have warned that the buy now, pay later demand signals consumers’ financial instability, which is a troubling sign for their long-term health.