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As we enter the 2025 holiday season, shoppers are eager to celebrate but their wallets are under pressure. According to Katapult’s new eBook, Holiday Spending in 2025: Trends, Tensions & Takeaways, nearly 80% of consumers express financial concern heading into the season, and three in four plan to spend the same or less than last year.
That means retail growth this year won’t come from expanding budgets, it’ll come from capturing share. And in a market defined by cautious spending, retailers that emphasize affordability and flexibility will win the checkout.
What’s Driving Shopper Behavior
Inflation remains the number one concern for 65% of U.S. shoppers, with limited credit or financing options coming in second. Consumers are seeking payment solutions that make big-ticket items attainable without hidden fees or long-term debt.
Across every demographic, affordability dominates as the top decision factor when choosing how to pay.
— 60% say low monthly payments are most important.
— 45% prioritize a low upfront cost to get started.
— 43% value flexible repayment over time.
Retailers that make these features clear — on product pages and throughout the customer journey — can reduce cart abandonment and boost conversion among price-sensitive shoppers.
Non-Traditional Payments Are Now Mainstream
Flexible payment options have become table stakes. More than 70% of shoppers have used Buy Now, Pay Later, and over half have used Lease-to-Own (LTO). This year, a remarkable 84% say they would consider using LTO, with 56% saying they “definitely would”.
In short: LTO is no longer niche. It’s a standard part of how consumers shop.
Where Shoppers Plan to Spend
Electronics, toys, and furniture top the 2025 holiday wish lists but categories like jewelry, gaming, and home furnishings are where flexible payment options make the biggest impact. When budgets tighten, customers lean on payment tools that stretch affordability while keeping purchases within reach.
What This Means for Retailers
Lease-to-Own options like Katapult’s don’t just help shoppers, they help merchants grow:
— Convert more carts: Remove affordability as a barrier at checkout.
— Capture loyal new shoppers: Reach customers traditional credit misses.
— Grow basket sizes: Especially in high-ticket categories.
— Protect your margins: No merchant recourse or interchange costs.
In a season where most consumers are standing still on spending, the winners will be those who make it easier to say yes — through transparent pricing, simple promotions, and flexible payment options that build long-term loyalty.
Download the eBook
The Holiday Spending in 2025 eBook reveals how alternative payments like LTO can help retailers thrive in a cautious spending environment.
