According to two consumer survey reports from Affirm, while consumers are eager to make up for a strained 2020 holiday season with more plans to travel, hosting parties and giving gifts, staying in budget is a top priority this season.
However, despite a steadfast goal to stay within budget, many consumers find it isn’t as easy as it sounds — 70 percent of Americans told Affirm they typically go over budget during the holidays. Not surprising since more than half of the survey respondents also said they feel pressure to overspend during the holiday season and say they typically have anxiety over holiday shopping. Notably, 28 percent of consumers cited shipping costs and 26 percent cited late or hidden fees as some of the biggest holiday stressors.
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Still, 48 percent of consumers say their budget is higher than normal this year because they couldn’t celebrate to the same extent last year. Top gifts that Americans say they will give loved ones this year include a memorable experience (42 percent), electronics (29 percent), clothing (25 percent) and a vacation (26 percent).
Notably, the gift most Americans say they would like to receive this year is a vacation. In fact, more than half of survey respondents said they would rather take a vacation than have a traditional family get-together this holiday season. However, more than 60 percent revealed concern for not being able to afford to travel as they would like due to pricing spikes. And 74 percent said they will spend more on travel this holiday season than ever before.
To find the best deals, shoppers are also starting holiday shopping early this year, with 61 percent of survey respondents saying they no longer wait for Black Friday and Cyber Monday sales. Nearly a quarter said this was in direct correlation to wanting to stay within budget.
At the same time, 56 percent of Americans say they are interested in using installment payment solutions, like Affirm, for holiday shopping. Of those, 69 percent said they will use buy now, pay later to help stay in budget even if they could pay for the item in full at the time of purchase.
“In addition to getting a head start on their holiday shopping, consumers are taking advantage of flexible payment solutions to help them spend responsibly this year. Over half of Americans are interested in using a pay-over-time solution for their holiday shopping this year and the majority (69 percent) will do so because they believe it helps them to better budget,” said Silvija Martincevic, chief commercial officer at Affirm. “With Affirm, consumers can responsibly navigate holiday spending by spreading out their purchases into simple biweekly or monthly payments.”
At the same time, as consumers ready themselves for more experiences, a recent report from The NPD Group, reveals that the apparel category is “on the mend” with 61 percent of U.S. consumers saying they need a new wardrobe — a trend and sales growth that Affirm says extends into payments offered at checkout as they see younger generations preferring BNPL services so that they can invest in higher-quality, aspirational and more sustainable items that they can feel good about purchasing.
In fact, Affirm’s recent partnership with Theory, the company said, is based on the trend that classic fashion brands are vying for Generation Z and young Millennials who see increases sales by providing an affordable alternative to fast fashion.
“Younger shoppers are increasingly aware of how their purchases reflect their values, but in many instances, socially conscious shopping comes at a higher price point,” Martincevic said. “By offering Affirm at checkout, contemporary fashion labels can give Gen Z and Millennial customers the option to invest in more high-quality, sustainable wardrobe staples on a biweekly or monthly payment schedule that works within their budget.”
By choosing to use Affirm at checkout on theory.com, consumers can pay in interest-free installments for any purchase over $50.
Affirm currently has more than 29,000 retail partners, providing help in driving overall sales, increasing average order value and increasing customer repurchase rates. In 2019, retailers who used Affirm reported 85 percent higher average order values compared to other payment methods used and in 2020 almost 67 percent of purchases were made by repeat Affirm customers.
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