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The 2018 Christmas Consumer Barometer

Every year, we use our online insight platform to access to UK consumers and dig beneath the surface of Christmas and take the pulse of the nation. We look at a broad range of topics, including shopping habits, perceptions of the festive season and plans for the day itself. This year we’ve decided to share some of that data so that you too can glimpse into the collective mind of the UK Christmas Consumer.

But why do we look at Christmas at all? Well, because of how important it is to the economy. The British Retail Consortium (BRC) estimates that 13% of all sales in the UK happen during the month of December – that’s 1.5 times higher than average sales evenly weighted throughout the year. While the BRC is quick to point out that this is not all Christmas shopping, it does serve to highlight just how important the month is.

Understanding consumer and shopper behaviour over the festive period is also key to estimating retail performance for the year ahead. The 2017 Christmas BRC report found December footfall to be down 3.5%, the sharpest decline since March 2013. What followed was a 2018 that has been widely described as one of the toughest years on record.

So, what does our Christmas survey reveal about the year ahead? Without further ado, let’s take a look at some of the key results.

Christmas Gift Spending

Perhaps one of the most interesting categories of festive shopper behaviour is the amount spent on Christmas gifts. This is often a reliable indicator of the amount of disposable income available during the holiday season and can be seen as a predictor of spending habits over the upcoming year.

Notably, our survey found Christmas gift spending trending towards greater extremes than in 2017. In particular, 14% of consumers surveyed responded they would be spending £600+ on gifts this year, making this category the most popular option on our survey. Additionally, our results reveal Christmas shoppers may spend a total of 1.3% more on gifts this year compared to 2017.

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Christmas Consumer Barometer 18: A surprisingly positive retail outlook predicts a 1.3% increase in spending on gifts.

This does, however, contrast with self-reported changes in planned spending. 13% of consumers believe they will spend less on gifts this year, compared to only 9% who believe they will spend more. While there could be many reasons for this, a plausible scenario is that the smaller group of consumers who plan to spend more have a greater increase in their disposable income compared to the larger group who will experience a smaller squeeze.

Covering the Cost of Christmas

While credit cards still remain a popular way to cover the cost of Christmas – with 21% of survey respondents reporting they will use credit to pay for gifts – consumers are more likely to dip into savings. Approximately 1 in 3 shoppers will pay for gifts out of their savings accounts and almost 1 in 2 (45%) plan to make use of vouchers or coupons to save money.

Consumers report the way they are most likely to save money is by looking for online discounts or coupon codes. This is followed by using cashback and price comparison sites, which consumers have an equal likelihood of using.

The High Street vs. The Internet

The most hotly contested retail battleground of 2018, it has been widely reported that the high street has been losing out to online stores; which has – in part – contributed to the closure of recognised, staple names. So, how do things look for the most important month of the year? Stable, for now.

Though 76% of us plan to purchase some of our Christmas gifts online this year, 74% will still make purchases at brick and mortar retail stores. The biggest loser, in fact, would appear to be the mail order catalogue, which only 11% of consumers plan to order from.

However, mobile purchases represent the most significant shift, as 24% of Christmas shoppers plan to buy a gift via mobile internet sites or apps this year. That’s over 5% more than last year. Such a fast-growing category might suggest troubles ahead for online retailers next year, as both non-mobile online retailers and high street stores could share the same pressures from mobile purchases.

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Christmas Consumer Barometer 18: A whopping 24% of consumers plan to make gift purchases on a mobile device.

A few category differences emerge too. Consumers are more likely to purchase small electrical items, event tickets, books, DVDs and toys online. However clothes and lingerie are more likely to be purchased in-store. Perfumes and fragrances have an equal chance of being purchased online or in-store.

As in years past, the main driver of online shopping is convenience. A total of 76% of online shoppers listed this as a key reason for purchasing Christmas gifts online. The other two most important factors include better prices (64%) and the ability to avoid crowds (60%).

Convenience was also found to be the main driver of in-store shopping. While less survey respondents reported this as a reason to shop in-store (35%) it was still the most popular choice. It is interesting to consider that convenience is listed as the driving factor for both online and in-store sales; suggesting that convenience is a subjective experience. However one thing is certain – regardless of whether a store front is digital or physical, the winners and losers of 2019 will be determined by which consumers feel offers the most convenient experience.

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Christmas Consumer Baromoter 18: Convenience is the most reported driver of both online and in-store purchases.

Technology and Christmas Day

The results of our survey paint a picture of a nation very much divided about the role of technology and Christmas. Less than 50% of our respondents would like to receive a digital device as a Christmas present. An even smaller amount , approximately 1 in 3, plan to buy one for others.

However, technology does often form part of the big day itself. 44% of our respondents plan to use a social networking site to wish a Merry Christmas to those they will not see on the day. This doesn’t yet encroach on the most popular method, a traditional Christmas card, which will be sent by 59% of us this year.

Further, only 3% of our respondents do not plan to use any digital device on Christmas day itself. Out of those that will use technology on the day, smartphones will be the most commonly used (68%), followed by laptops and satellite & cable TV. Christmas dinner itself however is a different matter; though 97% of us plan to use digital devices over Christmas day, this drops significantly to 38% during the traditional festive meal.

Forecasting the Year Ahead

The findings of our annual Christmas survey provide a helpful barometer for consumer behaviour over the year to come. It’s clear that there are still challenges for retailers and brands alike to overcome, and a new threat seems to be emerging. Both brick and mortar stores & traditional online retailers will feel the pressure from mobile spending. However, as disposable income and Christmas spending appear to be on the rise – there is an emerging opportunity.

It will be those who best understand consumers, their preferences and are able to offer the most convenient shopping experiences that make the most out of this stable and optimistic outlook.

*Based on a survey of 241 UK consumers.

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Christopher Martin

Written by Christopher Martin

Chris is experienced in marketing strategy and brand development, which he uses to skilfully guide the FlexMR brand to its full potential. Chris works hard maximising opportunities and ensuring the brand’s offering is relevant and appealing to insights professionals. You can follow Chris on Twitter or connect with him on LinkedIn.

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Topics: Business Strategy, Market Research, Research in Society