Americans are shopping earlier than ever before and leveraging flexible payments to manage their expenses during the holiday season according to newly released research from leading financial services company Zip Co (ASX: ZIP).
The survey of more than 3,000 U.S. adults revealed “that 57% of Americans are planning on completing their holiday season shopping by the end of November. Further, as many as 41% of BNPL users agree that it allows them to budget more effectively, with a standout 61% of those earning between $45,000-$59,999 echoing this sentiment.”
Zip’s U.S. CEO, Larry Diamond, said:
“We recognize the evolving payment landscape and the unique opportunity we have to research the dynamics shaping consumer behaviors and merchant strategies.”
Holiday spending reveals a convergence of age, income, and consumer preferences
- Gift Choices and Timelines: As the holiday gifting season approaches, the top three picks across age groups are Clothing (57%), Toys (44%), and Accessories (42%), like handbags and jewelry. Delving deeper reveals some age-specific trends; the 35-44 age bracket leans more towards Clothing (69%), while Tech gifts, such as smartphones and gaming devices, captivate 25-34-year-olds the most (51%). Meanwhile, the older 45-54 cohort shows a distinct preference for non-specific monetary gift cards (49%).
- Setting Aside for the Holidays: Monthly savings for holiday expenditures vary significantly across age and income brackets. Young adults (18-24), and those with earnings below $25k typically set aside $1-$50. Contrastingly, individuals 35-44s and BNPL users often allocate $101-$250. Remarkably, those earning between $100k-$150k frequently earmark over $1,000, showcasing the interplay of age, income, and savings strategy.
- Digital Shopping Preferences: The digital revolution has cultivated divergent online shopping behaviors. Young adults (25-34) exhibit a strong inclination towards social media shopping. High-income earners ($100k-$150k) demonstrate a staggering 90% preference for major online retailers, underscoring the need for tailored e-commerce strategies.
BNPL Gains Traction As Expense Management Tool During Holiday Shopping
BNPL emerges as a modern financial tool letting Americans indulge “in the holiday spirit sans immediate fiscal strain.”
However, prudent use remains imperative to ensure future financial pitfalls. Key survey results showed:
- Stretching Spending Power: A significant 48% resort to BNPL to purchase more gifts without feeling the instant financial pinch. This perception is more prevalent among individuals with incomes ranging from $75,000 – $99,999.
- Convenience Is Key: 47% of BNPL users acknowledge this payment method being an attractive payment option. And the proposition of splitting purchases interest-free appeals to many users.
- Instant Decision: Lastly, BNPL users bypass the sometimes cumbersome paperwork linked with traditional credit cards, ensuring a quicker shopping experience.