Wayne Pommen, Affirm’s (NASDAQ: AFRM) Chief Revenue Officer, noted that the holiday shopping season is here and for retailers, it’s “make-or-break time.”
Pommen also mentioned in a blog post by Affirm that despite recent inflation and economic uncertainty, retail spending is expected to “stay strong.”
The National Retail Federation forecasts Americans will spend “between $979 and $989 billion in November and December alone, marking a roughly 3% increase compared to last year.”
The shift? How and what consumers are buying. The blog post from Affirm also mentioned that this year, retailers who embrace trends like flexible payment options, interest-free financing, and self-gifting “will capture more sales.”
According to Affirm’s update, those that don’t “risk falling behind.”
Affirm added that consumers are making their preferences clear: paying over time is rising to the top.
This past quarter, Affirm grew more than four times “faster than U.S. e-commerce, and that momentum shows no signs of slowing.”
This growth is driven by consumers who are “increasingly choosing payment options that offer flexibility, transparency and control.”
According to Affirm, research supports this shift, “showing that more than half of Americans are using pay-over-time options to better manage their budgets.”
Affirm meets this need by giving consumers the ability to “break purchases into manageable payments – each plan with a clear start and end date – and never charging late or hidden fees.”
For retailers, offering payment flexibility “isn’t just a nice-to-have – it’s a must for attracting and retaining customers.”
Although inflation may be easing, prices are still “higher than what we’re used to, making shoppers more budget-conscious than ever.”
A recent Deloitte survey found that nearly “80% of consumers plan to shop holiday promotions. But they’re less focused on traditional discounts and more interested in financial flexibility – especially when it’s interest-free. In fact, a recent Affirm survey found that 50% of consumers value 0% APR promotions as much as —if not more than traditional discounts.”
They also found that 40% of Americans are more likely to “make a purchase if 0% APR is available.”
This trend is a win-win for retailers, “higher conversions, preserving profit margins, and fostering strong brand loyalty – much more effectively than traditional discounting.”
Another key trend: self-gifting. Consumers are buying more gifts for themselves, a trend that’s “fueling demand for products that they might have otherwise purchased after the holidays.”
Affirm further noted that early data shows a notable surge in consumer electronics and travel, “two of the top categories for self-gifting this year.”
Both saw a 40% to 50% year-over-year “increase in sales with Affirm over the Black Friday / Cyber Monday weekend.”
Retailers that position themselves “as the destination for tech upgrades or experiences will stand out this holiday season and beyond.”
Affirm also stated in the report that as we enter the final stretch of the holiday season, “it’s time to act.”
Affirm concluded that we can lean into these trends – by offering flexible payment offers, integrating “interest-free promotions, and supporting self-gifting – to finish the holiday season strong and help set your business up for success in 2025.”