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This holiday season, every time you arrange to pay off that expensive bag or new refrigerator with Affirm or Afterpay, you'll be driving up the Buy Now, Pay Later (BNPL) numbers that Adobe Analytics predicts will hit a record high.
Inflation and high interest rates have left many consumers with little in the way of discretionary budgets, but Adobe predicted that one in five will likely use layaway to buy gifts for the holidays, and that online BNPL spending will be 17% higher than last year, hitting $17 billion in November and December.
“Consumers are very price conscious,” Adobe Digital Insights lead analyst Vivek Pandya told Bloomberg. “Because of inflation, we’re seeing their debt levels increase and their savings level decrease.”
It ain’t about the money: Still, inflation woes aren’t likely to completely dampen the holiday shopping spirit.
In fact, Mastercard’s SpendingPulse report predicts holiday spending between November 1 and December 24 will be up 3.7% YoY.
Electronics is probably going to see the highest rise (6%), followed by restaurant spending (5.4%) and groceries (3.9%). Overall, Mastercard expects e-comm sales to increase 6.7%, and in-store purchases will be up 2.9%. Point is, with or without Buy Now, Pay Later, consumers will keep shopping.
As Retail Brew previously reported, “While the consumer of holidays past may have been a consumer trying to find footing in a rapidly shifting economy, the consumer of holidays present has taken their power back,” Michelle Meyer, US chief economist at the Mastercard Economics Institute, said in a statement.