In a consumer survey of 1,500 U.S. consumers, the companies found that 36 percent of shoppers are actually more likely to increase holiday spending compared to last year’s holiday season. At the same time, 64 percent of sellers based on a survey of 573 Square sellers in the U.S. told the companies they are expecting sales to grow or remain the same year-over-year.
“Our hope is that COVID-19 and inflation don’t affect consumer spending in the coming months,” said Blake Grandon, owner of Party Mania Bethesda, a party supply retailer in Bethesda, Maryland, who uses Square for online and in-person retail. “As a business owner, hiring and inventory have been the two most difficult issues to deal with this year, as costs for both are increasing significantly. It’s been busy preparing for the holidays, and since we had record holiday sales last year, our goal this year is to match or beat those numbers.”
The festive shoppers told Afterpay they had many reasons to spend. Gen Z and Millennials, specifically, told the company they are excited to see friends and family (29 percent) and are looking forward to the celebratory atmosphere (24 percent). Seventeen percent added that the holidays are all about the gifts with 8 percent reporting they love the retail therapy that comes with buying gifts for loved ones.
When asked why they buy gifts, more than half of the survey respondents (56 percent) said they want to show that they love and care about the person, while nearly the same percentage said they “want to put a smile on someone’s face.” For 43 percent, the act of giving is motivating.
In its analysis of how gift giving differentiates between generations, the company found that while older shoppers are more likely to give presents that recipients will find useful, younger shoppers (Gen Z and Millennials) want the experience to create something meaningful, maintain a relationship or be admired by others.
Still, shoppers are feeling heavily impacted by inflationary pressures and many are making cutbacks or trade-offs — making it even more important to offer what your customer is looking for, where they are looking for it. Additionally, a sixth of consumers said they plan to use a buy now, pay later service, like Afterpay, to manage and budget finances during the gift-giving period. Another 44 percent of consumers said they will look to purchase items on sale and 24 percent said they plan to cancel or stop certain activities such as subscriptions to save.
With survey findings in mind, Square and Afterpay shared key ways that businesses can prepare for the busy holiday season including leveraging omnichannel solutions to meet buyers where they are, communicate BNPL offerings, start promoting gift cards as soon as possible and setting up a referral or loyalty program to reward customers and build repeat business.