With Thanksgiving week and Black Friday behind us, we’ve officially launched into the holiday shopping season. This year has brought a mix of excitement and apprehension, with consumers expected to turn to credit cards and credit-like solutions, such as Buy Now, Pay Later (BNPL) to make purchases. Our data shows that the beginning stages of this trend are coming to fruition, after a Thanksgiving shopping bonanza that lasted the entire week. In this blog, we explore some key insights into the holiday spending trends based on early Marqeta platform data and our recent State of Credit report that we conducted of 3,000 US and UK consumers in partnership with Propeller Insights.
The end of Black Friday: BNPL is now stretching the holiday shopping season
Thanksgiving weekend was a blockbuster weekend for shoppers and retailers – according to Adobe Analytics, consumers spent $38 billion online, an almost 8% jump year-over-year, far outstripping expectations and driven by stronger than expected BNPL volumes.
Contrary to popular belief, the biggest shopping day didn’t happen on Black Friday. In 2023, like 2022, BNPL transactions through the Marqeta platform were highest on Thanksgiving Day itself, showing that the shopping starts right after the turkey ends (if not before). BNPL transactions spiked 72% from Tuesday to Thursday, and fell 12% from Thursday to Black Friday, traditionally seen as the apex of the Thanksgiving shopping season. BNPL activity stayed high throughout the Thanksgiving week – in 2023 BNPL transactions only fell 15% from Black Friday to Cyber Monday.
The jump in BNPL spending was echoed by our BNPL data, which saw a 33% year-over-year increase in BNPL spending for the week covering the Tuesday before Thanksgiving through to Cyber Monday, and processed 23% more BNPL transactions in 2023 than 2022.
Credit card spending is expected to increase this holiday season
As the holidays rapidly approach, we can expect credit and BNPL to remain major financial lifelines for consumers, as confirmed by our survey. With consumer spending expected to increase during the holidays, the majority of consumers surveyed (61%) are planning to use their credit cards to make their purchases, as opposed to debit or cash. Additionally, 22% of US consumers surveyed said they planned to use BNPL to pay for their holiday shopping – amongst 26-34 year olds and 35-50 year olds this rose to 36% and 33% respectively.
Consumers are concerned about making holiday purchases
Our survey shows that consumers are concerned about how they’re going to make purchases without going into debt this holiday season. After a year of exceptionally high living costs, due to inflation and rising interest rates, consumers are feeling the crunch and credit is helping them make ends meet.
- 48% of consumers surveyed are concerned about being able to make purchases this holiday season
- The anxiety is higher in the US, with 51% reporting that they’re concerned about holiday purchases, compared to 43% in the UK.
- US consumers are also expected to be more reliant on credit, with 49% of consumers surveyed saying they’ll use credit solutions to make ends meet this year, compared to 39% in the UK
Gifts and entertainment are the biggest splurge items
When it comes to how and for what consumers plan to shop this year, gifts, entertainment and retail are the top splurge items for many. Forty-eight percent of consumers surveyed said they plan to splurge most on gifts while 32% plan to spend on entertainment experiences, such as dining out or concerts. The survey also reveals that consumers in the US are more focused on gift-giving whereas UK consumers reported splurging the most on experiences.
- US respondents: gifts (61%), eating out/concerts (55%) and clothing (45%)
- UK respondents: eating out/concerts (54%), clothing (47%) and gifts (39%)
The data reveals that it's clear that consumers are approaching the holiday season with a mix of concern and excitement. Following a year of rising living costs, it's apparent that credit cards will play a pivotal role this season, serving as a financial lifeline for many, enabling them to fulfill their holiday shopping needs.
Get more consumer insights from our State of Credit report here.
