Two-thirds of American shoppers say they’re spending less on their needs than they did last year.
Inflation is dampening holiday shopping budgets, both globally and in the United States. With the domestic cost of goods and services up 7.7% in October year-on-year, many shoppers are trimming lists, skipping time-sensitive sales or skipping gifts altogether.
One bright spot for retailers this holiday season is the slight increase in total consumer spending. According to a November PYMNTS report, “Black Friday 2022: High Prices Reshape Holiday Shopping Habits,” 67% of holiday shoppers, or 136.4 million people, made at least one holiday shopping on Black Friday 2022 — up 3% from 2021.
Black Friday also saw a surge in digital payment usage compared to last year:
Looking more closely at the data, the most significant growth seen during this Black Friday was digital wallet usage – both online and in-store.
The increase in stationary usage can be attributed to an increase in physical traffic compared to last year when lockdowns related to the pandemic were still being eased.
This surge in Americans using alternative payment methods for Black Friday purchases coincides with a 9 percent increase in the use of digital wallets for in-store purchases worldwide, according to PYMNTS’ How the World Does Digital.
The September report compiled 15,000 consumer insights across 11 countries, using the ConnectedEconomy™ Index to provide an overview of the current state of global digital transformation.
As mobile wallets become more accepted by retailers and merchants, PYMNTS has found that consumers who use digital methods for one activity are more likely to use them for other activities in adjacent sectors, further connecting the digital economy. For example, consumers who use digital payments for travel might also be more likely to use them for meal delivery services like Uber Eats or Just Eat Takeaway. This networking promotes greater digital engagement overall.
Digital and mobile wallets may not yet be used interchangeably with cash or physical credit and debit cards, but the shift appears to be on the horizon. Their slow but steady gain in market share suggests consumers (especially millennials) are looking for payment methods that simplify their shopping experience.
While Black Friday revenue has declined year on year, the rise in usage of mobile and digital wallets suggests these alternative payment options will remain an integral part of the connected economy. This suggests that for retailers and merchants, integrating digital payment methods remains a solid investment in long-term sales strategies.
How consumers pay online with saved credentials
Convenience is prompting some consumers to store their payment information with merchants, while concerns about security are causing other customers to pause. For How We Pay Digitally: Stored Credentials Edition, a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 US consumers to analyze the consumer dilemma and how merchants can overcome resistance.