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By Matt Boss
• Dec 18, 2018
Head of Credit Cards and Unsecured Lending

With shoppers planning to spend an average of $530 this year in gifts, there will be plenty of happy gift-getters, but what trends are driving those purchases? Are people bargin-hunting? Are they paying with a credit card? Is financing popular? To get a snapshot of how shoppers approach holiday gift-buying, TD Bank surveyed 1,000 Americans on their shopping habits this season.

Bargains and discounts are very much on the minds of Americans this season. Whether they shop online or in stores, price comparison has become a competitive sport. More than half of shoppers prefer to shop around both online and in person, and 60 percent compare prices online when shopping in retail stores.

As expected, cost also plays a role in where people shop and what motivates them. Forty-six percent of shoppers say variety of products is most important to them. That’s followed closely by the 42 percent who cite discounts as the primary factor. Discount days, however, reign supreme. Half of Americans (50 percent) cite sales events as the single most important factor overall in their holiday shopping.

Customized Discounts Among Top Trends

The two top trends that are piquing shoppers’ interest are also focused on savings, with an emphasis on personalization. Thirty-seven percent say customized coupons are most likely to get their attention, followed closely by discounts via geotargeting, at 35 percent. Digital advertising is also proving to be a powerful and persuasive force. Nearly 40 percent of shoppers have purchased an item directly from social media advertising demonstrating the increasing influence social channels have on commerce.

Paying for Purchases: Debit and Credit Cards Lead

Perhaps the key part of the shopping experience for many people is choosing how they’ll pay for gifts. The most popular payment method is a debit card (36 percent), followed closely by a credit card (34 percent), check (17 percent), store-branded credit card (7 percent) and in-store financing options (4 percent).

Shoppers plan to stay on top of their credit card use, with 57 percent paying off their purchases immediately or within a month. Nearly all (96 percent) will pay off their purchases within a year.

Credit Incentives Could Add Up to Good Deals

Sixty-six percent of Americans don't plan to finance any of their holiday spending. That makes sense for some, but credit cards and loyalty programs that offer special financing, discounts, points, miles, cash back or other incentives can work in shoppers’ favor, allowing them to stretch their holiday dollars a bit further and space out repayment.

In line with the discount-hunting that characterizes the 2018 season, shoppers are more inclined to finance purchases when they can recieve a lower price. More than six in 10 (61 percent) Americans said they were most likely to pursue financing for their holiday shopping if it offered them significant savings.

Rewards and special financing programs have grown substantially over the years as retailers understand that encouraging shopper engagement and loyalty is a winning proposition. Shoppers enjoy a better experience, including saving money, and are more likely to return throughout the year.

This holiday season, like many before, shoppers are keeping an eye on prices, sales events, rewards programs and financing options – but more than ever they're focused on their experience and customized offers. As the NRF data shows, Americans aren’t shopping less; they’re shopping smarter. That means today’s savvy shoppers are wrapping up the perfect gift at the right price and earning rewards or other benefits when they pay. This year, shoppers want to be sure that every dollar they spend buys more.

A version of this article originally appeared on LinkedIn

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