How Buyers Are Financing Holiday Purchases This Year

Consumers strapped for cash are turning toward BNPL apps

A woman online shopping.

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Despite high inflation trends and concerns about a potential recession, shoppers spent at record levels online on Cyber Monday and Black Friday amid a flurry of steep discounts, thanks in part to buy now, pay later (BNPL) apps.

BNPL apps partner with retailers to make it easier for consumers to buy products online then pay for them over time. BNPL orders were up 78% from Nov. 19 to Nov. 25 compared to the week prior, according to Adobe Analytics. The firm tracks more than 85% of the top 100 internet retailers in the U.S.

About 40% of consumers said they will finance one or more of their holiday purchases this year, including with credit cards, personal loans, and BNPL apps, according to a study by LendingTree and PYMTS. And the likelihood that consumers will finance their purchases increases with their financial strain. About 52% of people who reported they live paycheck-to-paycheck, or who struggle to pay their bills, plan to finance holiday spending.

Thanksgiving Holiday's Record-Breaking Sales

Consumers making purchases online spent a record $11.3 billion on Cyber Monday, up from 5.8% from spending on the same day last year, according to Adobe Analytics, which tracks more than 85% of the top 100 internet retailers in the U.S. Spending on Black Friday hit $9.12 billion, up 2.3% from Black Friday last year.

Meanwhile, shoppers also flocked back to stores in record numbers over the holiday weekend. From Thanksgiving Day to Cyber Monday, 19.7 million shoppers returned to in-person shopping, according to the National Retail Federation. Overall, with both online and in-person shopping, a record 196.7 shoppers made purchases over that five-day period, up 9% from the same period last year. The NRF had expected 166.3 million shoppers.

"As inflationary pressures persist, consumers have responded by stretching their dollars in any way possible," Matthew Shay, NRF president and CEO, said in a statement. "Retailers have responded accordingly, offering shoppers a season of buying convenience, matching sales and promotions across online and in-store channels."

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  1. Adobe Analytics. "2022 Holiday Shopping Trends and Insights Report."

  2. PYMTS. "New Reality Check: The Paycheck-to-Paycheck Report."

  3. National Retail Federation. "Record 196.7 Consumers Shop Over Thanksgiving Holiday Weekend."

  4. National Retail Federation. "Record 166.3 Million Shoppers Expected During Thanksgiving Season."