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34% of Shoppers Plan to Spend More This Holiday Season
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Economic impact payments (also known as stimulus checks) and fewer spending choices during the coronavirus pandemic helped some U.S. consumers boost their savings. In turn, Americans are planning to ramp up gift spending this holiday season.
A new report from Stockholm-based, “buy now, pay later” platform Klarna finds that 34% of U.S. shoppers plan to spend more on holiday gifts this year than in 2020. Another 41% say they’ll spend roughly the same.
Going deeper, 53% plan to boost their budgets by $101 to $500. Shoppers getting an early start expect to spend 16% more, on average, than those beginning later.
Millennials have the highest average budgets
Millennials (ages 25 to 40) expect to spend the most across generations, with an average budget of $739 and an average preferred price point of $242. This is followed by Gen Xers (ages 41 to 56), with an average budget of $700 and an average preferred price point of $173.
Baby boomers (ages 57 to 66) have the third-highest budget for the holidays at an average of $695, with an average preferred price point of $79. And Gen Zers (ages 18 to 24) have the lowest holiday budget this season, with an average of $543. While Gen Zers have the smallest average budgets, they have average preferred price points higher than baby boomers at $157.
Besides having the largest budgets across generations, millennials are more inclined to purchase an item after seeing it on social media (79%). Plus, nearly 7 in 10 (69%) millennials are interested in attending livestream shopping events — where brands present and promote products and engage with consumers via digital platforms — during this year’s holiday season.
Battle of the sexes: Men have larger holiday budgets than women
Men plan to spend an average of $783, according to the findings, with an average preferred price point of $231. Meanwhile, women have an average budget of $611 and an average preferred price point of $107.
Nearly 7 in 10 (69%) men would prefer a gift card over a physical gift, and 58% would enjoy one big gift over several little ones. However, 73% would like a physical product over an experience.
Women, on the other hand, would prefer several little gifts over a single big gift (59%). However, like men, 62% would like a physical product rather than an experiential one. And like men, 64% of women would prefer to get a gift card over a physical gift.
Shoppers getting an earlier start this year
Four in 10 (40%) U.S. shoppers plan to get an earlier jump on their holiday shopping than last year. More than one-fifth (22%) of American consumers have already begun purchasing gifts for the holidays, while another 22% plan on starting before Black Friday. Here’s when the remaining respondents plan to start:
- On Black Friday (15%)
- Between Black Friday and Cyber Monday (7%)
- On Cyber Monday (5%)
- Between Cyber Monday and Super Saturday, known as the Saturday before Christmas (4%)
- On Super Saturday (2%)
Younger shoppers, in particular, are getting an earlier start on perusing stores and online retailers for holiday gift-giving needs. In fact, 56% of Gen Zers and 61% of millennials express this sentiment. And 48% of Gen Zers and millennials say they’ll start before Black Friday.
Nearly 3 in 4 American consumers are checking items off their shopping lists earlier this year to scoop up deals and sales, but other reasons include making sure the items they want are available (50%) and steering clear of shipping delays (45%).
Majority of holiday shopping done on Black Friday
According to the Klarna survey, U.S. consumers in 2020 doled out the most dough on Black Friday (43%), Amazon Prime Day (41%) and Cyber Monday (34%).
This year looks to shake out slightly differently. In regards to shopping for gifts, U.S. consumers feel they’ll buy the lion’s share of presents on Black Friday (49%), followed by Cyber Monday (38%). More than 1 in 5 (22%) shoppers plan to purchase most of their holiday presents the Saturday before Christmas. (It’s worth noting that Amazon Prime Day was in June in 2021, versus October in 2020).
It also comes as no surprise that 44% of shoppers plan to do most of their holiday shopping this season online, while 30% expect to shop mainly in stores. Meanwhile, nearly 3 in 10 (27%) consumers expect to shop equally in-store and online.
Younger shoppers are choosing debit over credit
Younger generations are more inclined to pay for gifts with debit (59%) rather than credit (50%). Further, 75% of Gen Zers, 76% of millennials and 60% of Gen Xers are looking for flexible payments.
To avoid holiday debt hangover, consumers who plan to use credit for holiday purchases should do so with caution. Set limits and consider using points from cashback rewards credit cards to get gift cards.
Methodology: Klarna pulled data from multiple sources:
- A survey of 23,188 U.S. Klarna users ages 18 to 66-plus in August 2021
- A survey of 1,000 U.S. consumers ages 18 to 66-plus, conducted by Dynata in August 2021
- Klarna shopping data on online purchases during November and December 2020
- The most-saved items in Klarna’s Collections feature in the U.S. app between January and July 2021