1-In-3 Consumers Plan to Spend Less This Upcoming Holiday Season
Discover's annual Holiday Shopping survey reveals a significant shift in consumer spending due to the COVID-19 pandemic. 35% of consumers plan to cut back on holiday spending, nearly double from 18% in 2019. Generation X and millennials are leading this trend, with 42% and 36% respectively opting to spend less. The survey highlights that 74% of consumers are shopping online more, with 68% choosing contactless payments for safety. Concerns about identity theft among Gen Z surged to 59% this year. Discover aims to assist consumers with its rotating rewards program.
- Increased preference for online shopping, with 74% of consumers participating more.
- Growing support for small businesses, with 77% of Gen Z shopping more frequently at them.
- High engagement in contactless payments, with 78% of millennials using them more.
- 35% of consumers plan to cut back on holiday spending due to financial instability.
- Generation X and millennials are the most likely to reduce their holiday spending.
RIVERWOODS, Ill.--(BUSINESS WIRE)--The COVID-19 pandemic has affected the lives of millions, and its impact will trickle into how much, and where, consumers plan to spend this holiday season, according to Discover’s annual Holiday Shopping survey. The number of consumers who plan to curb spending almost doubled in one year, from
Financial instability and disrupted social engagements are the top reasons consumers report shifting their budgets. Of those who plan to spend less:
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37% attribute their decision to financial instability caused by COVID-19 -
32% attribute their decision to spend less on food and decorations due to a lack of holiday gatherings -
28% attribute their decision to no longer needing to travel like they have in years past
“The pandemic has affected many aspects of life for nearly all consumers, and this holiday season will be no different,” said Meera Sridharan, vice president of rewards and product strategy at Discover. “As consumers navigate holiday spending decisions, we’re here to help them get the most for their money. The Discover it® Cash Back card, for example, has a rotating rewards calendar that complements consumers’ shifting spending throughout the year, and given the acceleration in online shopping, we are featuring top ecommerce retailers for this holiday season.”
Contactless Payments Increase
As consumers change their holiday plans, they are also changing where they are shopping. In light of COVID-19,
A strong majority of younger consumers also plan to support small businesses. Seventy-seven percent of Gen Z and
Of those who plan to do most of their holiday shopping online, nearly half of those surveyed,
Even when shopping in-store, consumers are favoring contactless technology, as
Consumers across all generations are using contactless payments when shopping for the holidays, the survey found. Notably,
“We’ve seen a remarkable change in consumers’ shopping behaviors since the pandemic began, and by equipping our credit cards with contactless technology, we are solving a customer need while also giving cardmembers another convenient and safe way to pay at stores,” said Szabolcs Paldy, senior vice president of portfolio marketing at Discover. “Tapping and paying with a contactless credit card is seamless, and is one of many ways our customers can pay when using a Discover credit card.”
Fraud Concerns Sharply Increase Among Gen Z
Even as more consumers are planning online transactions, their overall concern with fraud remains about the same as it was last year. Eighty-five percent of consumers reported some level of concern about identity theft and fraud in 2020, compared to
However, Gen Z’s concern rose sharply. Fifty-nine percent of Gen Z reported moderate- to high-concern about the risk of fraud – an increase from
About the Survey
All figures, unless otherwise stated, are from a Dynata (formerly Research Now/SSI) survey conducted on behalf of Discover Financial Services. The survey was conducted online; fielded from October 21 to 23, 2019, and from September 22 to 25, 2020, with a total sample size of 2,010 (2019) and 2,000 (2020) US adults (ages 18+). The margin of sampling error was ±5 percentage points with a 90-95 percent level of confidence. The following generational breaks were used when examining the data: Gen Z (18-22), millennials (23-38), Gen X (39-54), and baby boomers (55-73).
About Discover
Discover Financial Services (NYSE: DFS) is a digital banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America's cash rewards pioneer, and offers private student loans, personal loans, home loans, checking and savings accounts and certificates of deposit through its banking business. It operates the Discover Global Network comprised of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance around the world. For more information, visit www.discover.com/company.