Holiday forecast finds half of holiday budgets will be spent on gift cards

With more gifting occasions, fewer shopping days and tighter budgets this year, consumers plan to look for a little extra help with their holiday shopping, according to the annual holiday forecast from global branded payments provider, Blackhawk Network (BHN). Shoppers will look to gift cards to spread holiday cheer, with surveyed consumers planning to spend half of their holiday budget on gift cards. Savvy consumers also plan to tap AI for shopping help and will look to leverage loyalty programs and stored value to power their holiday spending this year.

“Consumers are kicking off the holiday shopping season earlier each year and tapping into tech and loyalty points to help them check off their lists,” said Jay Jaffin, chief marketing officer, BHN. “Our research found that a growing number of people will be leaning on gift cards, actively looking for rewards and leveraging the points and stored value they’ve accumulated in loyalty and reward programs to fuel their holiday shopping. Also new this year: while consumers look both online and in-store for the best buying options, about one in five surveyed shoppers said they plan to use AI to help with everything from finding the best deals, to comparing products and getting gift ideas. As shoppers adopt increasingly strategic approaches to holiday budgeting and spending, our annual holiday forecast helps retailers to better understand and leverage consumer trends, allowing them to be well-equipped to maximize resources and hone marketing and gift card program strategies for holiday success.”

Key findings from the research include:

Gift cards now account for half of planned consumer holiday spend

Surveyed consumers plan to spend $760 on holiday gifting overall this year, which is relatively flat over 2023. However, shoppers plan to spend 48% of their total holiday budget on gift cards—up from 39% in 2023. While shoppers across all generations plan to spend more on gift cards this year, the largest increase is among younger shoppers. Gen Z and millennial consumers plan to spend more than half of their total holiday gift spend (54%) on gift cards, an increase from 41% last year.

‘Tis the season for micro gifting

For many, the holiday season goes beyond building up to one day or week of the year and is instead a series of opportunities to show gratitude and celebrate the season with the many people that touch their lives. Between family, friends, coworkers, teachers and service workers, the number of gift-giving occasions is increasing, particularly among Gen Z, who are twice as likely as Baby Boomers to be attending holiday gift exchanges with friends. Younger generations report planning to purchase 25% more gift cards this year than older generations, likely to account for the difference in number of holiday gift exchanges. Younger surveyed shoppers plan to purchase a total of 19 gift cards this holiday season (12 physical and 7 digital), while older generations plan to purchase 15 gift cards (9 physical and 6 digital).

Loyalty programs are powering holiday spending

While we’ve seen inflation cool when compared to the last few holiday shopping seasons, our research shows that inflation remains the top concern for consumers. Forty-five percent of surveyed consumers said they plan to change their shopping behaviors, with a key focus on value and deals this holiday. For many consumers, loyalty programs with stored value that they have built up will serve as a digital couch cushion this holiday season, helping shoppers find some extra spending power—especially for younger generations. Of the surveyed Gen Z and millennial consumers, 43% plan to pay for holiday gifts with store or credit card points and 26% plan to purchase gifts using loyalty points (i.e., hotel, airline, etc.).

For more findings and actionable insights to maximize the holiday shopping season, download the American Holiday 2024 Shopper and Gift Card Insights.

About Blackhawk Network (BHN)

Today, through BHN’s single global platform, businesses of all kinds can tap into the world’s largest network of branded payment solutions. BHN helps businesses grow revenue, increase loyalty, motivate and reward their teams, disburse funds and engage consumers. Branded payment solutions include the issuance and distribution of gift cards, egifts, corporate payouts and rewards, along with the technology to deliver these products in seamless, integrated ways. BHN’s network spans the globe with more than 400,000 consumer touchpoints. Learn more at BHN.com.

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