Consumer Spending Expected to Rise This Holiday Season after 2014 Dip

Discover’s Annual Holiday Survey Highlights Digital Divide in
Shopping Preferences between Millennials and Non-Millennials

RIVERWOODS, Ill.–(BUSINESS WIRE)–Spending is expected to be on the rise this holiday season, according to
Discover’s annual holiday survey. After an 11 percent drop in expected
holiday spending from $1,014 in 2013 to $900 in 2014, consumers plan to
spend 3 percent more in 2015. Compared to five years ago, when holiday
shoppers planned on spending $730 on average, this year’s anticipated
spend of $927 represents a 27 percent increase.

When differentiating between millennials and non-millennials, the
younger generation is spending more at a faster rate: 43 percent of
shoppers between the ages of 18-34 expect to spend more this year than
they did last holiday season, compared to 22 percent of shoppers ages 35
and older.

The preferred method of payment for holiday shopping will be with a
credit card, as approximately 41 percent of those surveyed will pay with
credit, followed by 27 percent using a debit card and 18 percent
spending cash. Credit card usage is up 18 percent compared to five years
ago when only 23 percent of those surveyed planned on using their credit
card most often for holiday shopping.

Both millennials and non-millennials plan to spend similar amounts
overall this holiday season—$941 and $926, respectively—however, the
Discover survey found stark differences in the two groups’ shopping
habits.

Millennials prefer mobile shopping experience more than
non-millennials

Millennials are expected to outpace non-millennials more than 2-to-1
this year when it comes to shopping on mobile devices, as 73 percent of
millennials surveyed say they will use a smartphone or tablet for
holiday shopping, compared to 32 percent of non-millennials. Similarly,
52 percent of millennials say they’ll do most of their holiday shopping
online, compared to 42 percent of non-millennials.

When it comes to mobile wallets, 36 percent of millennials surveyed
currently use that technology, compared to 15 percent of
non-millennials. Among those using a mobile wallet, 80 percent of
millennials say they will use it for holiday shopping, compared to 69
percent of non-millennials.

Additional survey findings include:

• While millennials plan to spend slightly more this season than
  non-millennials, 66 percent of millennials say they will set a budget
  for holiday spending, compared to 52 percent of non-millennials.
• Consumers identified sales/discounts (57 percent), convenience (19
  percent) and customer service (13 percent) as the most important
  factors when shopping at retail stores this holiday season.
• Consumers are split when asked what type of shopping they plan to do
  most this year, with 45 percent planning to shop in-store and 46
  percent shopping online
• Credit card rewards continue to be a factor in choosing credit as the
  preferred method of spending. Of those using credit cards the most
  this season, 42 percent are doing so in order to earn rewards points

About Discover’s Annual Holiday Survey

The national survey of 1,508 consumers was commissioned by Discover and
conducted by Instantly, an independent survey research firm,
between October 30 and November 2, 2015. The maximum margin of sampling
error was ±3 percentage points with a 95 percent level of confidence.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment
services company with one of the most recognized brands in U.S.
financial services. Since its inception in 1986, the company has become
one of the largest card issuers in the United States. The company issues
the Discover card, America’s cash rewards pioneer, and offers private
student loans, personal loans, home equity loans, checking and savings
accounts and certificates of deposit through its direct banking
business. It operates the Discover Network, with millions of merchant
and cash access locations; PULSE, one of the nation’s leading ATM/debit
networks; and Diners Club International, a global payments network with
acceptance in more than 185 countries and territories. For more
information, visit www.discover.com/company.

Contacts

Discover Financial Services
Derek Cuculich, 224-405-0665
derekcuculich@discover.com