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US shoppers opt for budget-savvy shopping during 2023 holidays, leveraging AI as credit debt concerns loom large

November 16, 2023




BlackFriday press 1

New Klarna holiday research reveals Millennials' spending resilience, the most popular shopping hacks of the year, rising demand for interest-free payments as half of consumers say they are unlikely to settle their holiday credit card bills, and more

New York, NY – November 16, 2023 – As holiday shoppers navigate today’s evolving economic landscape and mounting credit card debt concerns, budget-friendly practices and new tech adoption is on the rise, according to new research from Klarna, the AI powered global payments network and shopping assistant. The research, which is based on a survey of over 15,000 consumers across 15 markets including over 1,000 in the US, unpacks key trends shaping the retail and payments sectors this holiday season.

“Klarna’s new research unveils a broader narrative of financial mindfulness and careful spending this holiday season amidst a challenging economic landscape and credit card debt concerns. Over half of US consumers are wary about credit card debt this season, with nearly 1 in 2 doubting their ability to pay off their holiday credit card bills entirely," said Kristina Elkhazin, Head of North America, Klarna. "Given this backdrop, it's no surprise that 81% of shoppers find interest-free payment options like BNPL appealing as they also lean into budget-smart choices, harnessing tech-savvy tools like AI to nab the best deals, and shopping sales events like Black Friday to save money on big purchases."

Key Findings

Prudence Takes Priority: The average budget for gifts in the US is $740, significantly outpacing spending projections in other markets, like the UK ($560), Germany ($371), and France ($396). However, a notable 61% of US consumers confirm that rising prices have altered their holiday shopping approach. This concern is prominent among Gen Xers (67%), Gen Zers (63%), and Baby Boomers (63%), while Millennials (56%) also express a significant concern.

  • US millennial shoppers report the largest budget among all age groups, totaling $1,169, while Gen Zers have the smallest budget at $462. Gen X shoppers and Baby Boomers have set aside budgets of $575 and $525, respectively.
  • To maximize value amidst economic uncertainty, US consumers are purchasing budget-friendly items (53%), reducing spending on non-essential items (53%), and shopping fewer items than before (45%). Millennials are the least likely (36%) to reduce spending on non-essentials, compared to Gen Zers, Gen Xers and Baby Boomers (54%, 59% and 63%, respectively).
  • 65% of US consumers plan to stick to a holiday budget this year, with Gen Z and Millennials leading the charge (71% and 76%, respectively). Enthusiasm for budgeting weans with age, dipping to 51% among  Baby Boomers.
  • 28% of Millennials , along with 26% of Gen Zers and Gen Xers, are considering selling or trading items to finance holiday expenses - a tactic found less appealing by Baby Boomers at 6%.

Credit Card Debt Drives BNPL Trends: Amid budget management concerns, the dangers of credit card debt loom large among US shoppers. Over half (53%) of US consumers express concern about incurring credit card debt during the holiday season; a concern that is slightly more pronounced among Gen Xers and Gen Zers at 58%. 

  • Nearly half (47%) of US shoppers believe they will be unable to pay off their holiday credit card bills in full.
  • The option of splitting payments into equal parts without extra cost or interest resonates with consumers, with 81% finding it useful during the holidays. This sentiment is especially strong among Gen Zers (89%).

Betting on Black Friday: Black Friday remains a pivotal shopping event for US shoppers – particularly among younger demographics. 

  • 74% of US shoppers are sure or considering shopping on this day, including around 9 in 10 Gen Zers and Millennials (89% and 91%, respectively).
  • 50% of US consumers mark Black Friday as the day they plan to spend the most – particularly Gen Zers (66%) – followed by Cyber Monday (36%).
  • 66% of US consumers are waiting for Black Friday sales to buy big-ticket items, including 74% of Gen Zers and 76% of Millennials. 
  • 52% of Baby Boomers plan to sit out the Black Friday altogether, possibly rooted in traditional shopping preferences or  lack of interest in the commercial buzz.

AI Adoption for Smarter Shopping: US consumers are starting to leverage AI for smarter, budget-friendly holiday shopping. 

  • Over a third (36%) of US shoppers are open to exploring AI to enhance their shopping experience this holiday season, especially Millennials (53%), with Baby Boomers (16%) being the most hesitant.
  • Among those open to AI, price comparison (50%) and finding deals and discounts (44%) emerge as the main attractions. Baby Boomers open to using AI place an especially high value in using it for price comparison at (86%).
  • For holiday shopping specifically, consumers find the biggest value from AI comes from discovering more cost-effective deals (27%) and utilizing AI's capabilities to uncover products they might not have considered otherwise (27%).
  • Among AI-wary shoppers, the joy that they get from shopping themselves (38%) is the most prominent reason for their reluctance. 
  • Among the 15 markets surveyed, US consumers show the highest inclination towards using AI for holiday shopping at 36%, followed by those in Romania and Italy at 33% and 30%, respectively. Consumers from Norway (15%) and Poland (12%) are the least likely to consider using AI for holiday shopping.

Millennials Lead Shopping Hacks : Consumers are embracing a range of shopping hacks in order to optimize spending this holiday season, with shopping during sales (64%) emerging as the most popular strategy, peaking at 70% among Baby Boomers. Coupons (50%) and loyalty programs (45%) are also popular.

  • Millennials show a stronger inclination towards modern shopping hacks like shopping apps (56%) and price comparison tools (50%) compared to any other generation.

*Methodology: Findings are based on the result of a survey of more than 15,000 consumers aged 18-75 in Czech Republic, France, Germany, Greece, Italy, Poland, Portugal, Romania, Spain, UK, US, Sweden, Norway, Netherlands, and Finland, fielded October 2023, conducted by the research agency Nepa. Definitions of each age group are Gen Z (18-26); Millennials (27-42); Gen X (43-58); and Baby Boomers (59-75).

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For additional information, please contact:
Adaline Colton
+1 (614) 429-9125

About Klarna

Since 2005 Klarna has been on a mission to accelerate commerce with consumer needs at the heart of it. With over 150 million global active users and 2 million transactions per day, Klarna’s fair, sustainable and AI-powered payment and shopping solutions are revolutionizing the way people shop and pay online and in-store, empowering consumers to shop smarter with greater confidence and convenience. More than 500,000 global retailers integrate Klarna’s innovative technology and marketing solutions to drive growth and loyalty, including H&M, Saks, Sephora, Macy’s, Ikea, Expedia Group, Nike and Airbnb. For more information, visit Klarna.com.