More than one-quarter (27%) of consumers are planning to spend more this holiday season compared to last year, new research from Square and Afterpay has shown, indicating consumer confidence is on a stable trajectory.
Positive sentiment is shared by businesses, with two-thirds (66%) of retailers and hospitality venues expecting sales to increase this festive season, and many building new revenue streams to secure more sales.
While consumers intend to shop more this season, savings remains a priority. The Square and Afterpay Festive Forecast reports 71% of Australians have indicated that they intend to shop for cheaper alternatives as they look for deals to avoid increasing costs.
This aligns with businesses’ plans to offer an average discount of 12%. To engage with consumers, merchants are leveraging various omnichannel tactics such as hosting a curated holiday event (43%) and offering special deals through loyalty programs (23%).
Increased desire for payment flexibility has meant consideration of credit card use for gifting purposes is decreasing while Buy Now, Pay Later (BNPL) preference increases. As consumers seek more flexible options at checkout, 16% of Australians are considering the use of BNPL to purchase gifts, with budgeting and money management cited as the key benefits.
The most popular gifting categories are gift cards (23%) followed by clothing, shoes and accessories (15%) and kids, babies, toys (13%) showing that while some are picking gifts, others are leaving the choice up to their gift recipients.
Three in 10 (30%) consumers plan to have all their holiday shopping done by the end of October. One in three (36%) plan to shop in November, with 11% waiting for Black Friday or Cyber Monday to grab a deal.
With these findings in mind, Square and Afterpay offer two ways businesses can prepare for the holiday season. The first is to encourage shoppers to come into stores by offering unique experiences or exclusive offers and the second is, consider shopping and wishlist apps as new social channels to increase brand discovery, promote products, and reach new consumers.