The holiday season is the most important time of the year for many retailers, and not just because it affords them an opportunity to finish the year in the black.
The season also tends to magnify existing consumer purchasing trends and strengthen them going forward. This is the case during any year, but the 2020 holiday shopping season was unlike any other. The global pandemic put a damper on many time-honored rituals, not the least of which were in-store shopping and gathering with friends and family.
Consumers adapted to these holiday shopping challenges much as they did in other aspects of their lives: They went digital. The vast majority of gift purchasing took place online in 2020, with 83 percent of consumers purchasing some — if not all — of their gifts on the web.
These are among the key findings to emerge from PYMNTS’ Holiday Retrospective Report: Merchant Insights For 2021 And Beyond, a study done in collaboration with and supported by PayPal and based on a survey of more than 2,000 United States consumers. PYMNTS research confirms that the 2020 holiday season was unprecedented in more than ways than one.
Consumers spent more overall during the most recent holiday season than they did in 2019. One might have expected the pandemic to make consumers less inclined to open their wallets, but they were actually likelier to have increased their spending over the previous year, and not despite the pandemic but because of it. Those who increased the amount they spent on gifts said they did so primarily to show their friends and families — and perhaps themselves — some love. Forty-one percent of these consumers cited wanting to splurge on gifts in difficult times, outweighing such factors as good prices or having extra money saved.
Consumers turned to a broader array of payment methods this past holiday season as well, with digital wallets emerging as key piece of the payments mix. Forty percent of shoppers used digital wallets to pay for gifts, for example, a 54 percent increase compared to 2019. This placed the payment method among the top three along with credit and debit cards, which were used by approximately 45 percent of consumers. Payment innovations like QR codes and installment credit also gained remarkable traction during the holiday season, with 62 percent of consumers increasing their use of the former option and 47 percent turning more to alternative credit solutions like buy now, pay later (BNPL) plans.
There was another notable distinction this past season: Consumers tended to do their gift buying on their own schedules, with 45 percent starting their shopping well before Thanksgiving weekend — the traditional start of the season. In fact, 20 percent completed all of their shopping before Thanksgiving weekend, while another 15 percent did not finish theirs until after the holidays.
PYMNTS research has shown that the pandemic is serving as a catalyst for lasting changes in many aspects of the economy, and the recent holiday season was no different. Seventy-five percent of consumers who switched to digital shopping channels said they will maintain some or all of these practices even after the pandemic ends.
The insights just scratch the surface of our research. To get the full findings, download the report.
