A more frugal and mindful holiday shopper is expected this season, according to a survey of more than 15,000 consumers from the research team at Klarna.
And while U.S. shoppers are pegged to spend more on gifts this year as compared to consumers in the U.K., Germany and France, Klarna said in its report that 61 percent of those polled said “rising prices have altered their holiday shopping approach. This concern is prominent among Gen Xers (67 percent), Gen Zers (63 percent), and Baby Boomers (63 percent), while Millennials (56 percent) also express a significant concern.”
Klarna said U.S. Millennial shoppers “report the largest budget among all age groups, totaling $1,169, while Gen Zers have the smallest budget at $462. Gen X shoppers and Baby Boomers have set aside budgets of $575 and $525, respectively.”
Authors of the report said 53 percent of respondents in the U.S. plan to buy “budget-friendly” items. The same number also expect to cut spending on non-essential items. And 45 percent said they expect fewer items than in prior years. “Millennials are the least likely (36 percent) to reduce spending on non-essentials, compared to Gen Zers, Gen Xers and Baby Boomers (54 percent, 59 percent and 63 percent, respectively),” the report stated.
Kristina Elkhazin, head of North America at Klarna, said the research “unveils a broader narrative of financial mindfulness and careful spending this holiday season amidst a challenging economic landscape and credit card debt concerns.”
As a result, consumers are turning to payment options such as buy now, pay later.
“Over half of U.S. consumers are wary about credit card debt this season, with nearly one in two doubting their ability to pay off their holiday credit card bills entirely,” Elkhazin said. “Given this backdrop, it’s no surprise that 81 percent of shoppers find interest-free payment options like BNPL appealing as they also lean into budget-smart choices, harnessing tech-savvy tools like AI to nab the best deals and shopping sales events like Black Friday to save money on big purchases.”
The report noted that 47 percent of U.S. shoppers polled believe they will be unable to pay off their holiday credit card bills in full. The research also showed that 81 percent of respondents found splitting payments without interest or extra fees appealing.
Regarding technology, 36 percent of U.S. consumers polled said they “are open to exploring AI to enhance their shopping experience this holiday season, especially Millennials (53 percent), with Baby Boomers (16 percent) being the most hesitant,” Klarna said in the report. The report also noted that of those shoppers open to AI, 50 percent would use it for price comparison, while 44 percent would leverage AI for finding deals and discounts. “Baby Boomers open to using AI place an especially high value in using it for price comparison at (86 percent),” Klarna noted.