We’ve covered the amount of holiday spending that is happening, but what about the spend that’s not taking place?

The news: Nearly 12% of US consumers said they do not plan to spend on experiences, gifts, or other items this holiday season, according to a September study by Deloitte. That’s a record high since Deloitte began tracking this metric.

• This somber fact is covered up by affluent consumers, who plan to boost their spending. On average, higher-income households (bringing in $100,000 or more per year) will spend nearly five times as much as their lower-income counterparts, according to the study.
• Higher-income households will spend about 15% more than they did last holiday season; meanwhile, households making less than $50,000 a year will spend about 22% less than they did in 2020.

How we got here: Consumer confidence dropped to its lowest level in a decade during November, per the University of Michigan Consumer Sentiment Index, as inflation rose to its highest level in nearly three decades.

A tale of two economies: Marketers aimed at the high end are continuing to aim high: Neiman Marcus’ holiday catalog, for example, features a $6.1 million diamond and a $38,000 champagne vending machine.

• At the other end of the spectrum, inflation has hit consumers on a budget, with even Dollar Tree raising its lowest prices to $1.25 to offset increased supply chain costs.

Buy now, pay later (BNPL) ascendant: Another reason some shoppers might be sitting out this year: Of the US adults who had bought holiday gifts on credit last year, 29% said they haven’t paid off those purchases yet, per a NerdWallet study from September.

• That could be why more shoppers are turning to services like Klarna, Affirm, and Afterpay. Total BNPL spending this year (through November 27) jumped 422% versus the same period in 2019, with BNPL order volume up 438%, per Adobe Analytics.
• Fifty-six percent of shoppers said they have bought something using BNPL they couldn’t pay off, per a study by neobank Oxygen cited in CNBC. The survey also found that 43% would be more likely to make a large expenditure if BNPL were offered.
• A DebtHammer study from November found that 66% of US adults expect to use BNPL services to finance their holiday spending—just 8 percentage points higher than the share of respondents who said they’ll turn to a payday loan or similar financing.

The big takeaway: It’s clear that many buyers are suffering. While price-conscious consumers have less spending power on average, meaningfully connecting with them could pay significant dividends in the long run.