RANCHO CUCAMONGA, Calif.—Amid largely positive economic results, U.S. consumers are taking a cautious “wait and see” approach to the holiday shopping season, Co-op Solutions is reporting
The company is reporting that within its payment portfolios both credit and debit transaction volumes fell month over month in November.
Overall, Co-op Solutions said its credit union portfolio data shows that November transaction volume rose by 4.8% in Credit and 1.5% in debit on a rolling 12-month basis, while month over month volumes fell by -2.6% in credit and -4.2% in debit.
Overall Trends
Overall, according to Co-op’s SmartGrowth team analysis:
Black Friday Offered Mixed Results
“Overall, the period spanning from Black Friday through Cyber Monday boasted impressive results, with a record 200 million shoppers shopping in stores and online,” the company said. “However, the average spent per shopper dipped to $321.41 from last year’s $325.44. And while eCommerce traffic rose strongly to 134.2 million this year versus 130.2 million a year ago, the number of people who visited physical stores fell slightly from 122.7 million in 2022 to 121.4 million this year.”
Online Shopping Continues to Grow
Co-p reported that its data show online shopping continues to grow in popularity, with more than one in four consumers shopping exclusively online on Black Friday. And for the first time, the majority of such sales were made over mobile devices. According to Adobe Analytics, 54% of Black Friday online sales were conducted over smartphones, an increase of 6% over 2022, the company noted.
“Spending across sectors continues to tighten, as more consumers gravitate towards Amazon, digital goods and other online retailers,” said Ryan Prentice, director, SmartGrowth Consulting Services at Co-op. “This narrowing in spend, during a celebrated shopping season, is a further proof point of the importance of digitization across credit union services.”
Gen Z Embraces BNPL
“While overall holiday traffic at brick-and-mortar retail stores remains soft this season, those who are spending are more likely to use buy now, pay later than ever before. BNPL is rapidly becoming the go-to financing choice for younger generations, especially Gen Z,” Co-op said. “According to a survey from PYMNTS Intelligence, those consumers who used BNPL or other deferred payment options spent 48% more on holiday gifts this year than those who didn’t use such methods.”
Added John Patton, Co-op senior payments advisor, “The challenge for credit unions is that if consumers are taking advantage of merchant-offered BNPL programs at the point of sale, those transactions won’t flow through their portfolios. Not only will they lose out on interchange income, but they won’t be able to view the member’s transaction data, so it won’t help them understand their shopping behaviors and offer the right products to fit their lifestyle.”
Travel, Dining Segments Close Out Strong 2023
“One of the biggest spending stories of 2023 has been consumers’ return to the levels of travel, dining out and entertainment not seen since before the pandemic. The Travel category is up 15.4% in Credit and 7.5% in Debit for the 12-month rolling period ended November 2023. Similarly, Dining & Entertainment is up 7.1% in credit and 3.1% in debit over the same period,” Co-op said.
According to Reuters, industry forecasters predicted U.S. airlines would see an increase of 9% in passenger volume over the Thanksgiving holiday period versus the same period in 2022, Co-op added.
Year-Over-Year Category Level Spending (Rolling Year Average, and Comparing November 2022 to November 2023)
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