What’s trending
this year?

Consumers are
spendy, they’re
savvy, and they’re
gifting early.

After a highly unusual holiday season in 2020, it seems that consumers are embracing the holiday season much as they have in years past: traditional gifts like clothing reign supreme, and many plan to spend the holidays close to home.

However, our Zip users 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 return to the new normal 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 USA
Completed by n=1685 respondents aged 18+
10 minute online survey among US Nat rep sample
Natural fall out of n=451 BNPL users

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 what we’ve seen at

Zip year over year.

Retail sales between November 2020 and January 2021 totaled $1.19 trillion.

This year, retail sales during the same period are projected to grow 7–9%, for a total of $1.28 to $1.3 trillion. (Deloitte)

Despite the reopening of stores this holiday season, a steady share of consumers are still opting to shop online.

Where consumers plan to make their holiday purchases

Last year, big box retail was big business.

Compared to Zip US’s overall growth during the holiday season, we saw:

    • Gift
    • Gift
    2x
    • Gift
    • Gift
    • Gift
    • Gift
    3.5x
    • Gift
    • Gift
    • Gift
    • Gift
    4x

In addition to big box retail, electronics retailers like Gamestop and Newegg saw a large holiday season lift in 2020.

What’s trending this year?
image description

It’s early yet, but these Zip retailers have been on fire in October (week of 10/11):

image description

Holiday Budgeting

image description

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

This holiday season
59%

of Americans are creating budgets for the holiday season.

33%

of BNPL users are setting aside $101 to $250 monthly.

Zip users are slightly more likely to set aside larger quantities of money ($251—1K+) per month.

Amount budgeted for holiday season spending

Nearly 1 in 5 Zip users intend to spend “much more”
than they did in 2020.

Changes in holiday spend compared to 2020
image description
Consumers are eager to return to a sense of normalcy for this holiday season. As the survey data shows, retailers can expect to see bigger holiday shopping budgets—particularly from BNPL users—looking not only for the best deals earlier than ever before but also flexible, transparent payment terms for all their holiday purchases. Brad Lindenberg, 
 Zip US Co-CEO

Shopping

image description

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.

More than half of Americans will do their shopping online this year.

Almost 51% of Americans plan to finish their Christmas shopping by November and more than half of BNPL users plan to finish shopping by Thanksgiving. Both groups are motivated by fear of shipping delays and product shortages.

Anticipated holiday shopping timing by generation

Like younger Americans, Zip 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.

43%

of Zip users prefer personalized suggestions from brands.

25%

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

35%

find inspiration 
via magazines 
or broadcast TV.

image description
Key insight

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

RETAILER CHEAT SHEET

What factors most impact consumers’ decisions on where to shop during the holiday season?

  • Special offers and getting a great deal
  • Low cost
  • Knowing that products will arrive ahead of the holidays
  • Product quality
  • Convenience of one-stop shopping
  • Supporting small and local businesses

Gifting

image description

Traditional gifts top the wish lists for Millennials, Generation X, and Baby Boomers, but experiential gifts are making headway among mid- to high-earners and BNPL users.

36%

of Americans prefer traditional gifts, such as tech products, clothing, and accessories.

image description
#1 Clothing has claimed the #1 position (31%) 
on the holiday shopping list 
for Americans.

BNPL users are particularly interested in gifting the following during this season:

18%

Streaming Services

12%

Charitable
donations

9%

their time & services 
(i.e. babysitting)

Zip users in particular are interested in gifting:

30%

SELF-CARE
GIFT CARDS

27%

TECH

image description

Americans

with household
incomes of
$80K+ want

EXPERIENTIAL

GIFTS

this holiday
season.

Travel

image description

No place like home for the holidays! The majority of Americans are
planning for local travel this holiday season.

Zip users, however, are more likely to jet set or road trip domestically to
visit family and friends.

Holiday travel plans for zip vs. non-zip users
THIS HOLIDAY SEASON
58%

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

42%

of Americans decided to set aside a budget for holiday travel, but 68% of Zip users are planning to spend on travel this year.

Zip users traveling this season are likely to do so:

  • IN THE US 64%
  • ABROAD 23%

Generation Z and Millennials desire travel as a gift


TO BE CLOSE TO THEIR FAMILY

and friends this season.

Summary

Ready to put these insights into action? 


Here's the high-level summary:

  1. While the majority of Americans 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 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, to secure their gifts on time in the face of supply chain issues.

    

The takeaway: It’s never too early to start promoting holiday deals. Make sure your 
ecommerce shop is up to snuff and anticipate any supply chain challenges to stay well 
ahead of consumer demand.



  3. Traditional gifts top the wish lists for Millennials, Generation X, and Baby Boomers, but experiential gifts are making headway among mid- to high-earners and BNPL users. 


    The takeaway: Sure, clothing and electronics will always be popular gifts—but businesses outside of traditional retail categories can get in on the action, too. Consider offering gift cards or subscriptions to make your offering more giftable.



  4. No place like home for the holidays! The majority of Americans are planning for local 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