The financial squeeze is forcing Brits to get creative in their festive shopping plans, with many selling possessions in order to afford gifts, others using loyalty points and credit cards, while booze has become just as important as turkey.
That is according to Sitecore’s third annual Holiday Shopping Trends 2023 report, based on a survey of over 2,000 UK consumers, which reveals – perhaps unsurprisingly that the vast majority of Brits (75%) say they will be spending the same or less this festive period compared to last year, 77% will buy cheaper presents and 69% will buy fewer gifts.
With one in three respondents saying they will do most of their research and shopping for gifts online, exceptional, and personalised digital experiences will be the difference between those retailers that have a Merry Christmas and those that find themselves left with nothing but coal, Sitecore reckons.
With disposable income feeling the bite, consumers are reconsidering what and, in some cases, who is making their Christmas lists this year. Almost half (46%) admit they will be buying less for their family and friends, and those likely to only buy for their kids is up from 56% last year to 63% in 2023. With this tightening comes new perspectives on the worth of gifts. Nearly half again (46%) plan to buy second hand products in a further challenge for retailers.
When asked which gifts certainly would not be considered, educational courses (75%) came out on top, followed by subscriptions (68%); charitable donations (54%); and luxury gifts (47%).
Last year, nearly three-fifths (58%) of parents said gifts for their kids were a “must have”, this has now plummeted to 39%. Gifts for children of friends and relatives have also fallen from 50% to 37%.
In a sign that this Christmas consumers might plan to drown their sorrows, alcohol is rated the top “must have” this year alongside turkey, chosen by 55% of Brits.
But kids might be able to have the last laugh and sneak in presents that could be age inappropriate or more expensive than parents intended, as 21% said they would spend no time at all researching gifts for their children if there was something specific in mind. And a further 18% would spend less than an hour, suggesting that retailers need to make the benefits of products prominent.
While cheaper gifts are making consumers’ baskets, alternative payments are used at the checkout as this year it is not just about what consumers are buying, but how they are buying.
To balance the books almost half (49%) plan to use loyalty points or rewards accumulated over the last 12 months to buy gifts; 29% will look to use financing services or credit cards; and 22% plan to use Buy Now Pay Later schemes.
To support consumers meeting their budgeting needs, retailers will need to diversify their payment services to help them spread the cost of purchases.
At the same time, loyalty is becoming a driver to secure consumer spend. Retailers should look to expand their points and rewards systems to deliver personalised and special offers that keep consumers coming back and help them manage a backdrop of economic uncertainty, Sitecore maintains.
Many retailers are now able to share real-time inventory updates with customers. This is valued by 75% of British shoppers, and can be an effective tool to drive sales.
Some 43% would purchase a product right away if they saw a shop was running low on stock. But consumers are increasing wary that retailers may be gaming the system, as 69% do not believe it when they see “only one left in stock”; 60% also said they had bought a product only to be told soon after that it is actually out of stock – a surefire way to alienate your customer base.
The report says that what remains clear is that convenience serves to keep consumers on side, and retailers need to deliver tailored product recommendations and offers they are looking for. Speedy shipping remains a top priority and can be the make or break between getting purchases over the line. Four out of five consumers say they buy more items to meet the minimum fee for free shipping, while 64% will not buy an item if it does not offer free shipping.
Finally, although online remains the go-to channel for many, consumers are still venturing onto the high street; a third (33%) plan to head in-store to make purchases, reinforcing the importance of an effective omnichannel strategy.
Sitecore interim chief marketing officer Hannah Grap said: “Consumers are facing another challenging holiday period, with many budgeting or, in some cases cutting back entirely, to purchase the gifts they want this year.
“Our findings should come as a stark reminder for brands that they will be at the very centre of this, with consumers relying on them to ensure they can still enjoy the holidays.
“Marketers will need to be more strategic than ever if they are to capture the attention of cash-strapped consumers. By tapping into customer insights to deliver timely and relevant content, brands will be well positioned to be on the top of their lists and reap the rewards.”
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