The annual holiday forecast1 from global branded payments provider Blackhawk Network found shoppers surveyed plan to spend 43% of their holiday budget on gift cards this year. This trend is largely fuelled by Gen Z consumers. The report also found that consumers aren’t starting their holiday shopping as early as they did in 2022, with many planning to wait until the last weeks of December.
“Our research found that after a year of economic ups and downs, consumers are still planning to spend on holiday, but overall gift spending will remain relatively flat as 96% of consumers report ongoing concerns about cost-of-living pressures,” said Jay Jaffin, chief marketing officer at Blackhawk Network. “Consumers will once again look to gift cards to make the most out of gifting, with shoppers planning to spend nearly half of overall gifting budgets on gift cards, a trend largely driven by younger consumers. For retailers, as the youngest generation of shoppers continues to wield their influence and spending power this holiday season, it has become vital to expand and optimize marketing and gift card programs to include new ways to attract and engage young consumers.”
To understand how shoppers will react to a year of economic volatility, the research commissioned by Blackhawk surveyed American shoppers about their plans and preferences for the upcoming holiday season.
Key findings from Blackhawk’s research begin with flat holiday spending but increased gift card use. Surveyed consumers plan to spend $770 on holiday gifting overall this year, which is a relatively flat 3% increase over 2022. However, shoppers plan to spend 43% of their total holiday budget on gift cards—up from 37% last year. Gift card load values are also expected to increase this year. Younger generations plan to purchase a total of 17 gift cards this holiday season (10 physical and seven digital), while older generations plan to purchase 10 gift cards (seven physical and three digital).
Reported increases in gift card spend are fuelled by Gen Z shoppers’ love for gift cards. Younger generations surveyed plan to buy 70% more gift cards than older generations this holiday season. Surveyed Gen Z consumers also plan to spend 56% more on gift cards and 9% more on gifting overall when compared to last year.
Blackhawk found that another noticeable trend getting a boost from Gen Z is a shift in preferred payment types when it comes to holiday purchasing. Younger generations plan to use secondary payment types much more often than older generations. While debit, cash and credit card payments remain the top three payment options among all generations surveyed, many younger shoppers surveyed will also look to store or credit card points (43%), mobile wallets (39%) and physical gift cards (37%) to pay for holiday gifts this year.
Whether it’s the extra shopping weekend on calendars this year or that consumers are no longer overwhelmed with headlines dominated by pandemic news, supply chain issues and labor shortages, retailers can expect shoppers to get a bit of a later start on holiday shopping this year—a trend also driven by Gen Z consumers. Blackhawk research found that 72% of surveyed Gen Z consumers plan to start shopping in November and December, with many reporting they won’t start until the end of December. With the increased likelihood of more last-minute shoppers this year, leaning into digital gifting will be key for retailers. eGift programs can adapt quickly and consumers continue to embrace digital gifting, especially those who miss holiday ordering deadlines.