Holiday spenders to rack up credit card debt, relying on Buy Now Pay Later options
A recent survey conducted by Censuswide on behalf of Invoice Home has revealed some interesting insights into consumer spending habits and retail strategies during the 2021 holiday season.
According to the survey, 25% of respondents plan to use buy now, pay later services for their holiday spending, with one in five millennials and Gen Z indicating they will use these services for their holiday expenses. This trend suggests that consumers are willing to go into credit card debt and use these services to afford their purchases this holiday season.
The survey also found that consumers are being strategic in their spending and customer experience is crucial. Petr Marek, co-founder and CEO at Invoice Home, stated that consumers aren't shifting away from spending but being strategic in how they spend and afford the season.
Retailers are divided on raising or maintaining prices this holiday season. While some retailers like E.l.f. Cosmetics plan to increase their prices by $1, others such as J.C. Penney and The Home Depot plan to hold their prices steady. Walmart and Lululemon have warned of higher prices to cope with tariffs.
The trend among retailers regarding price increases during the 2021 holiday season was to delay raising prices as much as possible. Retailers absorbed some of the higher costs initially, and importers used tariff delay windows to stockpile goods at lower tariff rates for the holiday season. However, by mid-2021, some price increases began to appear on specific goods, indicating a gradual pass-through of higher wholesale prices.
Nearly half of respondents expect to spend most of their holiday purchases with Amazon, while 18% plan to shop with small businesses this holiday season. The majority (82%) of respondents said they will reduce their spending on groceries and other necessities to cover their expenses.
Interestingly, 37% of Americans consider buying gifts more important than their credit card balance this holiday season. This suggests that consumers are willing to take on debt to afford their holiday purchases.
Finally, 33% of respondents will shop at big-box retailers like Walmart and Target this holiday season. In addition, half of respondents in the survey said they won't shop with retailers that increase their prices, up from 25% in 2024.
In conclusion, the 2021 holiday shopping season is shaping up to be a strategic one for both retailers and consumers. Retailers are balancing tariff costs, inventory strategies, and consumer demand, while consumers are being choosier with their purchasing decisions and prioritising customer experience.
- The trend of using buy now, pay later services for holiday expenses, as revealed by the survey, indicates that consumers are willing to incur personal-finance debt and utilize AI-enabled services to afford their purchases.
- Despite the divisiveness among retailers regarding price increases this holiday season, customer experience remains crucial, with consumers being strategic in their shopping choices and retailers absorbing some costs initially.
- As per the survey, Amazon is expected to be the destination for nearly half of holiday purchases, while a considerable percentage of respondents will also shop with small businesses, big-box retailers like Walmart and Target, and those prioritizing personal-finance management will cut back on necessities like groceries to cover their expenses.
- Technology-driven shopping methods will play a significant role in the 2021 holiday season, with 33% of Americans planning to use AI for their purchasing decisions, and half of respondents expressing unwillingness to shop with retailers increasing prices.
- Interestingly, the survey findings suggest that some consumers are prioritizing lifestyle aspects, like gift-giving, over their credit card balance and personal-finance obligations during the holiday season, showing a willingness to take on debt to ensure they can afford their retail purchases.
