- 46% of consumers began holiday shopping before November to help spread the cost.
- Affordability remains a key concern for many, with 53% of consumers worried about how they will be able to afford holiday expenses.
- EY survey finds nearly half of consumers plan to use credit to finance holiday spending
- Despite the popularity of seasonal sales, 73% of consumers are skeptical about the real value of holiday discounts
25 November 2024:UK consumers are starting their Christmas shopping early this year, driven by the desire to spread their spending and find the best value for money gifts. However, the cost of living crisis continues to have an impact on spending during the festive season, with many shoppers worried about how they will fund their Christmas shopping, according to the latest EY report. Christmas Shopping Survey.
The EY survey, which surveyed 1,000 UK consumers about their opinions and attitudes towards the upcoming Christmas sales season, revealed that while 64% of UK consumers enjoy sales events such as Black Friday and Boxing Day, an equal percentage will only shop on sale to stay on budget. Nearly three-quarters (73%) are skeptical about the real value of holiday discounts, and 55% of consumers are willing to pay full price for big-ticket gifts rather than wait for sales.
Concerns remain about how to meet holiday season expenses
This year, holiday promotions began early in the year, with many retailers offering Christmas products along with Halloween products. This caused consumers to do their holiday shopping before November, as almost half of them (46%) began doing their holiday shopping before November. However, there is increasing focus on affordability, with more than half of consumers (53%) worried about how to navigate the holiday season.
To manage costs, 45% plan to use credit and 40% plan to use the “buy now, pay later” option. Price is the most important factor for 48% of consumers when choosing which store to buy from, overshadowing other factors such as quality, availability and promotions.
Silvia Rindone, Retail Director at EY UK&I, said: “Consumers are clearly adapting to the current economic climate, starting their Christmas shopping earlier to take advantage of early deals and being more strategic with their spending. While the cost of living crisis remains a major concern, it’s encouraging that shoppers are finding ways to manage their budgets and still prioritize meaningful gifts for their loved ones.
“Retailers have an important role to play in supporting consumers during this period by offering flexible payment options and must clearly communicate their value proposition to shoppers, attracting price-sensitive customers with great prices and clearly expressing the value of the premium items in your range. When it comes to sales, they should carefully consider the timing and depth of promotions, and whether these are truly the best options for their customers.”
Bricks and clicks are no longer enough
Stores remain key to holiday shopping: 70% of consumers plan to shop in brick-and-mortar stores, which serve as a primary source of ideas and inspiration and allow customers to experience products before purchasing.
However, the majority of UK consumers will also shop online, with 70% planning to shop at online-only retailers, 52% at omnichannel retailers, 45% at marketplaces and 33% at online brands. . Social shopping, the selling and buying of products directly on social media, is becoming increasingly important: 20% of consumers expect to buy from shoppable social content, rising to a third (33%) of generation Z, who use social networks as a source of inspiration and trust the opinions of influencers and their peers. Shorter delivery propositions are also key: 22% prefer same-day delivery and 37% prefer next-day delivery, while only 30% prefer to use the retailer’s default delivery day.
Additionally, 53% of consumers will look for another item to purchase to reach the minimum purchase amount to get free shipping.
Silvia Rindone added: “To be successful, retailers must have a presence everywhere: featured or pop-up stores, and a strong proposition across all digital channels, including social media, to drive both online conversions and offline traffic. store. This broad approach adds complexity, as retailers must also tailor their messaging to meet consumers’ individual needs on the channels that matter most to them.
“The next few months are a critical time for many retailers. As their labor costs will increase next year, they need to ensure they drive margin in this golden quarter to be able to make investments in their proposition. Shoppers are willing to spend if the price is right and the proposition is strong, so continuing to operate as efficiently as possible while constantly improving the experience for customers is key. As in recent years, the market is becoming more difficult and only those able to continually evolve will prosper.”
High-value products are back in fashion
In a silver lining for electronics retailers, consumers appear to be returning to high-value categories like technology and electronics, with 29% planning to spend more in the category as they replace equipment purchased during the pandemic. Spending is also increasing on big-ticket items, with 31% expecting to spend more on experiences like dining out, travel, concerts and spa getaways.
Younger consumers (18-27 years old) are expected to spend more this holiday season, and more than a third of Generation Z consumers plan to increase their spending, particularly on food and beverages.
Prioritize budgets
Meanwhile, 27% of consumers expect to spend less on home and kitchen products. Half of UK consumers plan to wait for sales on clothing, accessories and technology and electronics. To stretch their budgets further, 82% plan to minimize food waste, 64% will buy fewer decorations and 52% plan to reduce lighting to save electricity. In addition, consumers continue to make more conscious decisions: almost half (45%) plan to buy more second-hand gifts, a figure that increases to 60% of Generation Z, and almost half intend to buy more local products and of sustainable brands.