Consumers are not deterred from holiday shopping by inflation or the pandemic, according to a new survey conducted by the Strawhecker Group (TSG) and the Electronic Transactions Association. In fact, over three-quarters (78 percent) of American consumers are planning to spend the same or more on their holiday shopping than last year while adopting new payment technologies and strategies that were experimental 2020, such as buy now/pay later (BNPL).
“Consumer spending is not slowing down,” stated Jodie Kelley, CEO of ETA. “Overall, consumers plan to spend more during the 2021 holiday shopping season, and shoppers are more comfortable in using various payment methods that they experimented with during the last holiday shopping season.”
For a visual interpretation of the study, view this infographic.
The reality of COVID-19 has empowered customers to experiment with payment options outside of traditional credit/debit cards and cash.
- Three-quarters (74 percent) of contactless cards users plan to continue usage after trying them this year, compared to 61 percent last year.
- Two-thirds (67 percent) of buy now/pay later (BNPL) users plan to keep using these services this year, compared to 48 percent last year.
- Almost three-quarters (72 percent) of digital wallet users plan to keep using their digital wallets, compared to 63 percent last year.
Consumers continue to express concerns that could impact the holiday shopping season. Almost half (47 percent) are worried about the safety of shopping in-store due to COVID-19, and more than half (55 percent) are concerned about empty store shelves due to supply chain issues. Consumers are turning to options like curbside pickup (71 percent) or delivery services (80 percent) to lessen their worry.
“As opposed to last year, where consumers’ focus was on saving money,” said Mike Strawhecker, President of TSG, “we see that they are keeping pace or increasing the levels of spending compared to last holiday season.”
TSG’s Acquiring Industry Metrics (AIM) platform shows a 14 percent increase in consumer spending using credit/debit cards from Sept. 2020 to Sept. 2021.
Additionally, consumers spent almost seven percent more on their retail eCommerce transactions from 2020 to 2021, with some industries experiencing significant changes. Consumer spending on credit/debit cards has increased six percent in grocery, 471 percent in motion pictures, and 32 percent in total apparel. Sporting goods stores and bicycle shops have cooled down, with sales decreasing by over three percent year-over-year. But spending at sports apparel stores (21 percent) and home supply stores (17 percent) experienced year-over-year growth.
This is the second year that TSG and ETA have joined forces to produce the annual Consumer Holiday Spending report. The 2021 study surveyed 512 U.S. consumers between Oct. 18 and Oct. 25, 2021, to understand spending habits, payment preferences, and opinions on emerging payments technology as a leading indicator for the holiday season. The margin of error is +/- 4.35% at a 95% confidence level.