Over 30% of consumers plan to spend more on gifts in 2021: Klarna

Dive Brief:

With consumers and retailers gearing up for the holidays, a new Klarna survey found that more than a third (34%) of shoppers expect to spend more on gifts in 2021 than 2020, and more than half (53%) of those planning to increase their budgets will do so by $101 and $500, per the survey.
The survey found that 62% of respondents plan on shopping with big-box retailers during the holiday season, followed by department stores (37%) and malls (34%). Seventy-one percent of Gen Z and 69% of millennial consumers also said they are interested in attending livestream shopping events, Klarna noted.
Nearly half U.S. survey respondents (40%) said they plan to start their holiday shopping earlier this year, and 56% of shoppers plan to continue buying online during Black Friday.

Dive Insight:

Klarna's report aligns with previous research indicating that shoppers might spend more during the 2021 holiday season, and retailers are preparing for the influx in sales. A September Deloitte report projects that holiday spending could increase between 7% and 9% this year. Online sales could grow somewhere between 11% and 15% from last year. Gen Z (57%) and millennial (53%) consumers were more likely to increase their budget for the 2021 holiday season than Gen Xers (32%) and baby boomers (12%), according to Klarna.

As shoppers prepare to spend more this year, retailers have been bracing themselves for the uptick in sales with more staff and earlier deals. Target said it would kick off its three-day sales event in October and introduce its new holiday price match guarantee from Oct. 10 through Dec. 24. Despite reports of a labor shortage, multiple major retailers from Walmart and Target to Macy's and Party City are staffing up ahead of the holiday season.

Klarna, a buy now, pay later services platform, found that many Gen X (60%), millennial (76%) and Gen Z (75%) consumers are seeking flexible payment options, but the majority of those three demographics prefer to buy their gifts with debit over credit cards. The buy now pay, later platform has been attracting both consumers and investors.

As Gen Z and millennial consumers indicated that they were interested in livestream shopping events, Klarna has experimented with the medium, and livestream shopping startups have attracted attention from investors. Earlier this year, Klarna and Cosmopolitan Magazine co-hosted "Hauliday by Cosmo x Klarna," a virtual shopping event for American Gen Z and millennial shoppers. This year alone, livestream shopping platforms like Talkshoplive, Ntwrk, Shopshops and Whatnot have brought in millions of dollars in investments from funders looking to capitalize on the U.S. livestream shopping market, which Coresight Research expects to reach $25 billion by 2023.