Like most consumers, credit union members are increasingly shifting to online channels to shop for the holidays.
That’s according to an analysis of CO-OP credit union members’ credit and debit card purchases from Thanksgiving Day through Cyber Monday. 27.5 percent of all credit card purchases came from digital channels. That’s a more than 2-point increase as compared 2017’s 25 percent. Debit transactions that came from digital channels similarly increased by 2.2 percentage points (from 14.8 percent to 16.6 percent).
Our findings were in close alignment with a November 24 report by Adobe Analytics, which found that this year’s Black Friday was the first day in history to see more than $2 billion in sales from smartphones.
In addition, the average amount of money spent per cardholder was also up this year, and in some cases, significantly. Credit cardholders spent an average of $292 over the five-day period, up almost 20 percent from last year’s average of $246. For their part, debit cardholders spent an average of $210 from Thanksgiving Day through Cyber Monday. That’s an increase of 11 percent over the same period in 2017.
Digital Spending Outpaces Other Channels
CO-OP’s analysis indicates that online shopping drove greater engagement at higher volumes. For example, the transaction data we reviewed shows that cardholders tend to spend more per transaction when shopping online. Over the 2018 holiday shopping period, the average electronic transaction made with a credit card was approximately $100, while in-person credit transactions averaged $77.84. Debit cardholders displayed similar behavior with electronic transaction averages at $54.80 vs. in-person averages at $40.70.
Members Shop for Experiences during the Holiday Season
Cardholder spending data also appeared to confirm a trend consulting firm Deloitte and others have observed over the past several years. Consumers, even those who value the ease and convenience of digital shopping, continue to value real-life experiences. Of the credit union member purchases made over the Black Friday shopping weekend, travel agencies, hotel and restaurant merchant categories all experienced sizable increases in both number of credit card purchases and average amounts of those purchases, each up at least 30 percent. While this may indicate more people traveled during the Thanksgiving holiday weekend, it may also be a signal of that “experience-over-things” trend.
According to Deloitte, consumers have increased their budget for experiences over the last five years. In 2018, experiences represent 40 percent of the planned holiday budget. And, PwC predicts consumers will spend more than 50 percent of their holiday budget on travel and entertainment, including hosting families in their homes and coordinating trips to celebrate with relatives.
Why Spend Analysis Matters for Credit Unions
Analyzing where and how members are spending is vital to achieving top-of-wallet status. It can also help you design the kind of personalized, predictive experiences members are increasingly looking for… during the holidays and beyond.
CO-OP’s portfolio of Digital Payments Solutions can help you stay top-of-wallet by meeting the ever-growing technology demands members expect, and giving them access to advanced payments apps and wearable payment options. Learn More