The news: US consumers overall will slash their holiday spending about 5% this year, while Gen Zers expect to cut it 23%, per Inkl.

How we got here: This move is driven by a shift in spending toward experiences and entertainment, leaving less for holiday shopping.

Retailers are already seeing customers trading down to cheaper options, per Inkl.

Why this should matter to banks: We’ve seen this trend among Gen Zers in other areas of spending—such as prioritizing vacations over saving—meaning their habits are consistent. In preparation for the upcoming holiday season, financial institutions (FIs) can tap into this to demonstrate a deeper level of understanding of their Gen Z clientele.

Last year we suggested marketing holiday budgeting tools. While that still holds, FIs should also customize the language of these tools to match customers’ actual goals. For example, instead of language about saving for the future, offer savings toward a goal that Gen Zers input themselves, such as a concert or vacation. FIs could then follow up with information about how to contact a banking expert to discuss strategies to achieve that goal.