Square and Afterpay’s new Festive Forecast points to optimistic consumer and seller sentiment this holiday season
Despite the rising cost of living, new research from Square and Afterpay reveals renewed excitement by both consumers and sellers heading into the festive season – with 36% of shoppers more likely to increase their holiday spending, and 64% of sellers expecting sales to grow or remain the same compared to last holiday season.
The Square and Afterpay Festive Forecast reports an almost equal weight distribution between online (53%) and in-store (47%) shopping preferences – demonstrating the need for retailers to meet consumers anywhere they want to shop. As a result, Square and Afterpay found businesses plan to sell on social media (59%), marketing campaigns (38%), and text message (16%). With anticipation of increased store foot traffic, Square businesses also report they plan to hire more staff (16%) and increase staff hours (23%).
“Our hope is that COVID and inflation don’t affect consumer spending in the coming months. As a business owner, hiring and inventory have been the two most difficult issues to deal with this year, as costs for both are increasing significantly. It’s been busy preparing for the holidays, and since we had record holiday sales last year, our goal this year is to match or beat those numbers,” said Blake Grandon, Owner of Party Mania Bethesda, a party supply retailer in Bethesda, MD, who uses Square for online and in-person retail.
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With holiday savings top of mind for consumers, one in six Americans plan to use a BNPL service like Afterpay to budget their finances during the gift giving period. To balance additional spending, nearly half (44%) will look to purchase an item if it is on sale, and a quarter (24%) plan on canceling or stopping certain activities such as subscriptions.
Key Festive Forecast findings include:
- Ready, set, gift: Three in four Americans (77%) plan to have all their holiday shopping done by December, while the rest will wait until December and the week before Christmas to finish their shopping lists.
- Gift of giving: Gift cards will be the most popular gift to give, especially among older generations. Square data confirms this trend with gift card sales peaking during the holiday season, and a third of annual sales projected to occur in December alone.
- Spending beyond presents: 53% of Americans said they will allocate funds towards food and drink, followed by socializing (36%), and decorations (26%) in addition to gift-giving.
- Join the FEASTivities: Roast potatoes (88%) was the top food Americans are eager to indulge in, while nearly half (48%) want to do away with eggnog.
- A divided boozy Christmas: More than half (55%) of Americans would love to receive alcohol as a gift, but the other (45%) would hate to be given it.
- Stocking up on ideas: Most Americans attribute gifting inspiration comes from friends and family (43%), followed by in-store environments (37%).
- Merry motivations: Three in five (56%) Americans say that they purchase gifts as a way to show love and care, while a third (34%) want to show gratitude and appreciation, and a quarter (25%) buy gifts because they feel it’s expected during the holiday season.
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With these findings in mind, Square and Afterpay offer key ways businesses can prepare for the busy holiday season ahead:
- Leverage omnichannel solutions to increase revenue and meet buyers where they are, while clearly communicating your store offers Afterpay in-person and online.
- Start promoting gift cards as soon as possible, highlighting them as a gifting option through marketing messages and social media.
- Given consumers trust recommendations from their friends and family, consider setting up a referral or loyalty program to reward customers and build repeat buyers.
In the past year, Square has seamlessly integrated Afterpay into its point of sale software, unlocking BNPL functionality to millions of online and in-person sellers. Square and Afterpay transactions have a 70% higher average order value compared to other payment methods, helping increase revenue this holiday season.1