Over a third (36 per cent) of shoppers in the UK believe they will be unable to pay off their holiday credit card bills in full, according to new research from Klarna, the AI-powered global payments network and shopping assistant.
Meanwhile, 56 per cent of all UK consumers are concerned about incurring credit card debt during the holiday season, according to the latest Klarna study. Because of this, 82 per cent of surveyees find the option of splitting payments into equal parts without extra cost (such as BNPL) useful during the holidays.
The new Klarna research is based on a survey of over 15,000 consumers across 15 markets including over 1,000 in the UK, and aimed to explore the key trends shaping the retail and payments sectors this holiday season.
However, BNPL was not the only technique that emerged as one that shoppers are looking to as part of their money-saving efforts. In fact, as many as 26 per cent of UK shoppers are exploring AI to enhance their shopping experience this holiday season.
Among those open to AI, finding deals and discounts (54 per cent), price comparison (51 per cent) and budget management (44 per cent ) emerged as the main attractions. For holiday shopping specifically, Klarna also found that consumers find the biggest value from AI comes from saving time (35 per cent) and uncovering products they might not have considered otherwise (23 per cent).
Is Black Friday the savings saviour?
Black Friday has also become an important date on the calendar for many in the build-up to Christmas. Sixty-three per cent of UK shoppers are sure they will shop, or are considering shopping, on Black Friday, slightly less than 2022 (67 per cent).
As much as 60 per cent are waiting for Black Friday deals to buy big-ticket items (electronics, jewellery or furniture), significantly up from last year, which sat at 47 per cent.
Forty-two per cent plan to only buy what they can afford and 41 per cent plan to only buy what they would have bought anyway, but at a cheaper price.
Raji Behal, head of Western and Southern Europe, UK and Ireland at Klarna, explained why BNPL options remain so popular: “Klarna’s new research unveils a broader narrative of financial mindfulness and careful spending this holiday season amidst a challenging economic landscape and credit card debt concerns.
“Over half of UK consumers are wary about credit card debt this season, with over one in three doubting their ability to pay off their holiday credit card bills entirely.
“Given this backdrop, it’s no surprise that 82 per cent of shoppers find interest-free payment options like BNPL appealing as they also lean into budget-smart choices, harnessing tech-savvy tools like AI to nab the best deals, and shopping sales events like Black Friday to save money on big purchases.”
Among those wary of using AI to help them shop during the holiday season, 33 per cent revealed that the joy that they get from shopping themselves is the most prominent reason for their reluctance.