The holiday season is here and retailers around the world are gearing up for their busiest time of the year.
Retailers have been hotly anticipating the holidays this year as the industry's recovery continues to pick up pace. After the events of 2020, consumer confidence is bouncing back and expectations are high. But what trends are we likely to see and what impact will they have on retail?
Our friends at Klarna have done their best to answer this question with their new report - The State of Smooth: 2021 Holidays Unwrapped.
The report is based on comprehensive surveys of over 24,000 US shoppers and Klarna consumers and gives retailers must-know insight into how customers will be spending their hard earned cash this holiday season.
Here’s our top takeaways from the report:
1. Smart payments are the gift that keeps on giving
The majority of shoppers plan to choose smarter interest-free options at checkout. Gen Z, Millennial, and Gen X shoppers are more likely to pay with debit (59%) over credit (50%), and the majority also seek out flexible payment options when shopping this holiday season (Gen Z: 75%, Millennials: 76%, Gen X: 60%). In addition to making big purchases more accessible, flexible payments help people spread the costs of the holiday season.
Top Tip: Ensure you’re fully equipped to offer and process smart payments in-store as well as online. It’s vital you give your customers choice and the ability to shop on their terms, however, they want and wherever they want. By having smart payment options integrated into your POS system, you’re able to mirror the experience of buying from your e-commerce store in a seamless and intuitive way. It makes life easier for your store associates and your customers will love the choice of different payment options available to them.
2. Santa’s going to need a bigger sleigh to handle expanding budgets
In 2020, holiday retail sales totaled over $188 billion in the US, an increase of nearly a third over the previous year (Adobe Analytics). In positive news for retailers, that trend is expected to continue. Over one-third (34%) of shoppers plan to spend more on holiday gifts this season, while 41% intend to spend the same amount as last year. Only 18% of people expect to spend less.
Don’t underestimate the spending power of the younger shopper: Gen Zers (57%) and Millennials (53%) are more likely than any other age group to expand their budgets this holiday season (Gen Xers: 32%, Baby Boomers: 12%) compared to last year.
Top Tip: Do you have the right retail technology in-store to make sure your associates can always say yes? Digital transformation and cutting-edge retail software - especially systems that work seamlessly together - help you give your customers what they want. The retail software you choose - and your IT architecture - play essential roles in helping you deliver the kind of experiences your customers desire. It’s why you need a flexible, best-of-breed approach to create your IT architecture and processes that work for you and your business.
3. Social is sleighing it
Social media’s influence on shoppers is unmatched among younger audiences. The vast majority of younger shoppers— 78% of Gen Z and 79% of Millennials— say they have purchased a product after seeing it on social media. The power of these platforms transcends to older audiences as well, with 55% of Gen Xers and 20% of Baby Boomers noting that they’ve been influenced by their feeds.
Klarna shoppers are particularly social media-inclined, with a whopping 84% saying they, too, have purchased a product after seeing it on social media.
With the majority of consumers searching for holiday gifts online, find opportunities to get your products in front of review sites and influencers who can put your products in the most positive light and lead to more sales.
Top Tip: Customer journeys are no longer linear and, by managing these capabilities and solutions, you enable your customer to create their own journey - you don’t even have to map it out for them. It doesn’t matter where their journey begins or the first touchpoint they encounter your brand. All that matters is giving them the experience they want, when they want it and wherever they want it. They expect a consistent experience across all touchpoints and it’s your job to give it to them.
Klarna’s report is packed full of insights into how your customers plan to shop this holiday season. Download the full report to take a deeper dive into everything we’ve covered above.
Last updated: november 14, 2025
