Christmas Shopping Habits Revealed

27/11/2018

The last quarter of the year often holds big promise for retailers; with Christmas – and associated activities – it’s usually seen as the pinnacle of the retail calendar, and the chance to boost sales. But what of Christmas 2018? Against a backdrop of confusion over Brexit and low consumer confidence[i], an impact on Christmas spend, particularly on big-ticket items, is expected. In this context, we delve into expected consumer behaviour for Christmas 2018.

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It’s safe to say that the arrival of Christmas comes as a shock to no-one, and as Brexit too has been a hot topic of discussion since the 2016 referendum, many British consumers may have planned their 2018 Christmas spend carefully. This, perhaps, may be a key factor as to why so many consumers hit the shops early to begin their Christmas shopping, with figures from our own research showing that 10% of shoppers are on the lookout for Christmas gifts all year round, particularly making the most of seasonal sales.

Furthermore, one report shows that 18% of Britons have completed shopping for the majority of their Christmas gifts by the end of October; figures comparable to the United States (18%) and Canada (21%), but much higher than our neighbours on the continent, with just 5% of the French and 10% of Germans equally as prepared.[i]

So, when do consumers start shopping for Christmas gifts? One study, conducted by the Centre for Retail Research, found that 11% of British shoppers get started in September or earlier, whilst another 18% get the task underway in October. However, 39% of us won’t begin Christmas shopping until the twelfth month rolls around.[ii] Again, if we compare our behaviour to that of our neighbours, 73% of the French begin their Christmas shopping in December, as do 49% of Germans, and 71% of Spaniards.

It’s certainly worth considering what drivers are pushing consumers in the UK to start shopping earlier. Whilst it’s fair to say that the current political climate is a factor, research suggests that 43% of people find buying presents stressful, and so many start planning ahead to limit the stress they experience during the Christmas period.[iii]

Therefore, what drives consumers to move ‘Christmas Shopping’ to the top of their to-do list? Mintel notes that November is usually a key month for advertisers, accounting for 14% of their spend, and for 6% of our panel respondents seeing Christmas adverts is a key trigger for seasonal spending. Added to this, our research shows that 19% of panellists began their seasonal shopping when the shops start to display Christmas items; but for 29% the trigger is when they see a gift that makes them think of someone.

Black Friday and Cyber Monday are also helping shoppers get ready for Christmas: two key consumer behaviours identified are maximising behaviour, consumers who want to get the most out of their time and money, and treating tendencies, for whom reduced prices result in reduced guilt when buying for themselves. Accordingly, Black Friday spend seems to be gathering pace with our own panel respondents, with 27% of our panel reporting to have made Black Friday purchases in 2017 up from 9% in 2015. But Black Friday is sometimes about looking after number one: with 30% of respondents using Black Friday to buy something for themselves.

But how much are people willing to spend on gifts? According to our panel, more people are looking to budget this year than last year; with the majority of respondents looking to spend no more than £600, and of these most are aiming to keep their spend between £100 and £199. Whilst we do see a spike in respondents looking to spend between £500 and £599, and an increased number of respondents planning to spend over £1000 in comparison to last year, the key takeaway is that more people will be watching what they spend.

This preference to limit Christmas spend could be linked to how people are choosing to buy gifts, with more people using money they’ve saved towards purchases than in previous years. We asked our panel to share with us how they were funding their 2018 Christmas shop, and notably almost twice as many people have chosen to save throughout the year (46%) in comparison to last year (25%). Similarly, more people have chosen to save over the last few months to fund their Christmas shopping, with 29% of respondents choosing to save this way in 2018 in comparison to 22% last year.

There are people planning on using credit to purchase gifts with 17% of respondents planning to use one credit card for their purchases, more than double last years’ 8%, whilst those planning to use multiple credit cards to make Christmas present purchases has remained the same at 3%. We’ve seen a 1pp decrease in panellists planning on paying retailers in instalments (down to 1%) and a 1pp increase in those planning to use their overdraft to finance present buying (up to 3%).

The way consumers in the UK are shopping for gifts is also changing, with many ditching the high street (and the crowds!) in favour of online shopping. Figures show that Britons who earn more than £50,000 per year are more likely to shop online for Christmas. The study further noted that 50% of dads go online from mobile devices to make late night ‘panic purchases.’[iv]

This is against a backdrop of a strong year for online retailers, particularly online pureplays, given that their online shopping experience eradicates a lot of the stress experienced by time-poor shoppers. This is furthered by the unification of online shopping and social media: Instagram’s shopping feature and the use of direct links to retailer pages on Pinterest mean shoppers can act with immediacy when they see something they like.[v]

After all, it’s not just panicked dads making purchases on their smartphone: as our panel reports that purchasing from this type of device has increased most readily among those aged under 35, who bought 63% of their Christmas gifts on a device for Christmas 2017, up 19pp on the previous year; proving it’s a great time for retailers to up their mobile game.

However, we know that Christmas shopping goes beyond gift buying: and figures show that in 2017 in the UK we spent an estimated £22bn on groceries during the festive season.[vi] Whilst Retail Insight Network proposes that growth within the food and grocery industry will slow to 2.5% this Christmas, against 2017’s 3.6%. And whilst a fall in volume is predicted due to consumers trading down, expected trends for retailer focus includes non-alcoholic drinks, and plant-based protein dishes, reflecting wider consumer trends.[vii]

Unlike gift buying, Christmas catering can’t always be purchased in advance, and once drinks, sides and mains have been bought and made the cost for the host can add additional pressures at an already expensive time of year. As reported by the BBC some families are now asking guests to pay up, and share the cost of the Christmas meal.[viii] Whether you agree with this, or think it goes against Christmas etiquette, it seems that as many consumers are trying to save on gifts, there’s active debate on how to save on Christmas dinner too.

So, reflective of the current climate, it seems that consumers are keen to keep Christmas traditions going, but aware that it’s important to watch what they spend on gifts and catering over the Christmas period.

 

 

 

[i] Dentsu Aegis Network, Consumer Confidence Report

[i] BBC News, One in five of us has already done our Christmas Shopping

[ii] BBC News, One in five of us has already done our Christmas Shopping

[iii] Canvas8, Busy Britons Skip the High Street for Xmas Shopping

[iv] Canvas8, Busy Britons Skip the High Street for Xmas Shopping

[v]  Retail Insight Network, Modest Christmas cheer for UK with £99bn Q4 sales forecast

[vi] BBC News, One in five of us has already done our Christmas Shopping

[vii] Retail Insight Network, Modest Christmas cheer for UK with £99bn Q4 sales forecast

[viii] BBC News, Is it ever ok to charge family for Christmas lunch?

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