As cost-of-living concerns continue to affect Christmas shopping plans, Brits are getting spending savvy according to Sitecore’s third annual Holiday Shopping Trends 2023 report, a survey of over 2,000 UK consumers. According to Sitecore, a global leader in end-to-end digital experience software, three quarters say they will be spending the same or less this festive period compared to last year, 77 per cent will buy cheaper, with 69 per cent buying fewer, gifts.
As consumers rein in their spending, it has never been more important for brands to invest in their digital strategies to drive sales, loyalty and maximise the golden quarter. With one in three respondents saying they will do most of their research and shopping for gifts online, exceptional, and personalized digital experiences will be the difference between those retailers that have a Merry Christmas and those that find themselves left with nothing but coal.
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 per cent) admit they will be buying less for their family and friends, and those likely to only buy for their kids is up from 56 per cent last year to 63 per cent in 2023. With this tightening comes new perspectives on the worth of gifts. Forty-six per cent plan to buy upcycled or vintage products in a further challenge for retailers.
When asked which gifts certainly would not be considered, people included:
- Luxury gifts (47 per cent)
- Subscriptions (68 per cent)
- Charitable donations (54 per cent)
- Educational courses (75 per cent)
Last year, 58 per cent of parents said gifts for their kids were a ‘must have’. This has now plummeted to 39 per cent. Gifts for children of friends and relatives have also fallen from 50 per cent to 37 per cent. In a sign that this Christmas might be tricky for consumers, alcohol is rated the top ‘must have’ this year alongside turkey, chosen by 55 per cent 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 per cent said they would spend no time at all researching gifts for their children if there was something specific in mind. And a further 18 per cent 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 isn’t just about what consumers are buying, but how they are buying. To balance the books:
- Almost half (49 per cent) plan to use loyalty points or rewards accumulated over the last 12 months to buy gifts
- Twenty-nine per cent will look to use financing services or credit cards
- Twenty-two per cent 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.
Many retailers are now able to share real-time inventory updates with customers. This is valued by 75 per cent of British shoppers, and can be an effective tool to drive sales. Forty-three per cent would purchase a product right away if they saw a shop was running low on stock. But consumers are increasingly wary that retailers may be gaming the system, as 69 per cent do not believe it when they see ‘only one left in stock.’ Sixty per cent also said they bought a product only to be told soon after that it is actually out of stock – a surefire way to end up on consumers’ naughty lists.
What remains clear is that convenience serves to keep consumers on side, and retailers need to deliver tailored product recommendations and offers they’re on the lookout 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 per cent won’t buy an item if it doesn’t offer free shipping.
Finally, although online remains the go-to channel, consumers are still venturing onto the high street. Thirty-two per cent plan to head in-store to make purchases, reinforcing the importance of an effective omnichannel strategy.
“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,” said Hannah Grap, interim chief marketing officer at Sitecore. “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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