What's trending
this year?

Canadian consumers are spendy, they're savvy, and they're staying close to home for the holidays

After a highly unusual holiday season in 2020, Canadians are embracing the holiday season much as they have in years past, but with a cozy, local spin: many plan to spend the holidays in their own city or town, spending predominantly online, with household items like furniture and decor at the top of the gift list.

However, Buy Now, Pay Later (BNPL) users in Canada are a trendsetting bunch, and hints at a crack in the status quo have emerged in their approach to budgeting, gifting, and experiencing all that the holiday season has to offer. This report covers everything retailers should know to make the most of a rebound in spending during the 2021 holiday season.

This report is based on findings from a Zip survey as well as proprietary Zip data.

Survey Methodology:
Online survey conducted by YouGov, on behalf of Zip Canada
Completed by n=1640 Canadian respondents aged 18-65
10 minute online survey among Canadian Nat rep sample

The Big Picture:
Total Holiday Spending

Before we jump into the details, let’s take stock of the big picture. Here’s a quick look at macro consumer trends and how this compares to last year’s holiday shopping season.

Overall holiday spending is expected to rise by 31% compared to last year’s numbers, up 8% from 2019’s average spend. (Deloitte)

When it comes to spending, Canadians are most likely to be spending on:

GIFTs 89%
CELEBRATIONS 78%
TRAVEL 42%

And it's younger Canadians and BNPL users leading the charge in plans
to spend more this holiday season.

AVERAGE SPENDING
$1,124 Gen Z
$930 Millennials
$1,198 BNPL USERS
$834 GEN X
$667 BABY BOOMERS
$743 NON-BNPL USERS
Holiday Season Shopping Channels By Generation

Holiday Budgeting

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While the majority of Canadians are creating budgets ahead of the holiday season, BNPL users are more enthusiastic – setting aside larger quantities of cash and planning to spend more.

This holiday season
55%

of Canadians are creating budgets for the holiday season.

$192

Intended monthly spend for Gen Z
(more than Millennials, Gen X, and Baby Boomers)

$257

Intended monthly spend for BNPL users
(significantly higher than $145 budgeted by non-BNPL users)

Monthy Budget for holiday spend by generation
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Canadians may not be ready to travel internationally this holiday season, but they're eager to shop. Retailers can expect higher spends this year, especially among young Canadian Buy Now Pay Later users - those looking to spend more now and pay later. Steve Croth, Managing Director, Zip Canada

Shopping

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Convenience reigns as the majority of BNPL users aim to complete holiday shopping online and early to secure their gifts on time in the face of supply chain issues.

THIS HOLIDAY SEASON

MORE THAN HALF
OF CANADIANS

are planning on getting the majority of their holiday season shopping completed by Black Friday / Cyber Monday to ensure they get the best deals, but also avoid potential shipping delays and retail crowds in store.

BNPL users are even more motivated,

with 48%

planning to have completed their holiday shopping by Black Friday / Cyber Monday.

Anticipated holiday shopping timing by generation

Like younger Canadians, BNPL users are more likely to shop in digital channels, participate in digital shopping events, and seek inspiration from brands, media and influencers for holiday gifts.

19%

of Canadians
want to be
offered personalized suggestions
from brands.
This jumps to
30% for BNPL
users.

36%

of Canadians seek holiday gift inspiration from browsing websites of their favourite brands.

25% GEN Z 15% MILLENNIALS

find online
influencers a great
source of inspiration
for gift-giving.

27%

of BNPL users
look to
influencers
for gifting
inspiration.

Gifting

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Traditional gifts and practical items top the wish lists for Canadians this year,
while travel and experiential gifts lag.

THIS HOLIDAY SEASON
40%

of Canadians prefer traditional gifts, such as tech products, clothing, and accessories, over any other category.

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#1 Household items (furniture, decor and homewares) has claimed the #1 position (70%) on the holiday shopping list for Canadians, followed by gift cards (59%), and tech (25%)

BNPL users are more interested in gifting:

60% gift cards
29% Tech
25% subscriptions

Younger generations (Gen Z and Millennials) are more likely than older generations (Gen X and Baby Boomers) to gift non-monetary gifts, like giving their time, this holiday season.

28% non-monetary gifts
19% donations to charitY
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Travel

image description

There's no place like home for the holidays! The majority of Canadians (56%) are planning for local travel this holiday season. However, BNPL users, Gen Z, and Millennials are more likely to jet set or road trip domestically to visit family and friends.

THIS HOLIDAY SEASON
58%

of Canadians do
not plan to
spend anything
on holiday travel
this year.

37%

of Canadians wiling
to travel plan to
visit the US.

Gen Z and Millennials are more likely to desire

TRAVEL
AS A GIFT

to be close to their family and friends.

INTERNATIONAL SHOPPING

One in five Canadians plan on purchasing gifts internationally this year, 12% from specifically US retailers.

Of those willing to spend internationally,

53%

plan on
purchasing their
gifts online only.

31%

are opting for a
hybrid of online and
in store shopping.

15%

of Canadians plan
to specifically
travel across the border to purchase gifts in store.

On average, Canadians are planning on spending $332 on gifts purchased outside of Canada this year, with BNPL users significantly outspending non-users ($364 compared to $297).

International Shopping spend plans for bnpl users vs. non-bnpl users

Clothing (50%), accessories (40%), and tech (39%) are at the top of international shopping lists.

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However, the majority of Canadians prefer to spend locally.
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Key insight

Younger Canadians cite payment flexibility as a leading factor in their decision-making process.

RETAILER CHEAT SHEET

Canadians choose not to shop
internationally because:

  • They feel they can buy all the gifts they need locally
  • They would rather support local,
    small business
  • They don't want to risk shipping delays
  • They prefer to shop in their own currency
  • They don't want to pay for international shipping

Summary

Ready to put these insights into action?

Here's the high-level, TL;DR summary:

  1. While the majority of Canadians are creating budgets ahead of this holiday season, BNPL users are more enthusiastic – setting aside larger quantities of cash and planning to spend more.

    The takeaway: If you’re not already offering flexible payment solutions at checkout, it’s time to start. Consider partnering with an installment payment provider like Zip to capture the healthy appetite of BNPL users this holiday season.
  2. Convenience reigns as the majority of BNPL users aim to complete holiday shopping online and early, with BNPL users and younger Canadians looking to brands and influencers to inspire their holiday shopping cart.

    The takeaway: Canadians are eager to snag items on sale so make sure your ecommerce shop is up to snuff! And if you aren’t already curating product recommendations or working with influencers to promote your brand, now’s the time to start to meet the younger generations where they are.
  3. Traditional gifts top wish lists across demographics, but gift cards and subscriptions are popular with BNPL users.

    The takeaway: Spending so much time at home has Canadians obsessed with upgrading the space they live in— so traditional retail categories are likely to stay hot this season. But businesses outside traditional categories can get in on the action too! Consider gift cards or subscriptions as channels to make your offering more giftable, especially to the younger generations.
  4. No place like home for the holidays! The majority of Canadians are planning for minimal travel this holiday season. BNPL users, however, are more likely to jet set or road trip domestically to visit family and friends.

    The takeaway: Everyone approaches the holidays differently. Embrace the true spirit of the season, whatever that means to you!

Become
a Zip Merchant

Interested in learning more about the benefits of offering Buy Now, Pay Later ahead of the holiday season?

Learn more about becoming a Zip merchant at the link below.

Learn more