Over half of consumers worrying how they will afford Christmas
Affordability remains a key concern for many consumers this Christmas, with 53% worrying about how they will afford the festive season.
To help spread the cost, 46% of consumers started their Christmas shopping before November and, to manage costs, 45% plan to use credit and 40% intend to utilise ‘buy now, pay later’ options.
Price is the most critical factor for 48% of consumers when choosing which brand or retailer to shop with, overshadowing other factors such as quality, availability and promotions.
That’s according to a new ‘Holiday Shopping Survey’ by professional services firm EY, which polled 1,000 UK consumers on their views towards the upcoming holiday sales season.
It revealed that, while 64% of UK consumers enjoy sales events like Black Friday and Boxing Day, an equal percentage will only buy on sale to stay within budget.
Almost three-quarters (73%) are sceptical about the real value of festive season discounts, with 55% of consumers willing to pay full price for important gifts rather than wait for sales.
Silvia Rindone, EY UK&I Retail Lead, said: “Consumers are clearly adapting to the current economic climate by starting their holiday shopping earlier to pick off early bargains and being more strategic with their spending.
“While the cost-of-living crisis remains a significant concern, it’s encouraging that shoppers are finding ways to manage their budgets and still prioritise meaningful gifts for their loved ones.
“Retailers have an important role to play in supporting consumers through this period by offering flexible payment options and must clearly communicate their value proposition to shoppers, while attracting price-sensitive customers with great prices.
“When it comes to sales, they need to carefully consider the timing and depth of promotions, and whether these are truly the best options for their customers.”
Half of UK consumers plan to wait for sales on clothing, accessories and electronics, while many are continuing to make more conscious choices, with 45% planning to buy more second-hand gifts, rising to 60% of Gen Z, and almost half intend to buy more local products and from sustainable brands.
Stores remain key to festive shopping, with 70% of consumers planning to make purchases in physical stores, which serve as the primary source of ideas and inspiration and allow customers to experience products before purchase.
However, the majority of UK consumers will also be shopping on online channels, with 70% planning to shop with online-only retailers, 52% with omnichannel retailers, 45% with marketplaces, and 33% with brands online.
Social shopping – the selling and buying of products directly on social media – is becoming increasingly important, with 20% of consumers expecting to purchase from shoppable social content, rising to a third (33%) of Gen Z, who use social media for inspiration and rely on influencer and peer reviews.
Shorter delivery propositions are also key, with 22% preferring same-day delivery and 37% next-day delivery, while only 30% prefer to use the retailer’s default delivery day.
Additionally, 53% of consumers will find another item to buy to meet the minimum purchase amount for free shipping.
Rindone added: “To succeed, retailers must have a presence everywhere – standout stores or pop-ups, and a strong proposition across all digital channels, including social media, to drive both online conversions and in-store traffic. This broad approach adds complexity, as retailers must also tailor their messages to meet individual consumer needs on the channels that matter most to them.
“The next few months are a critical time for many retailers. As their labour costs will increase next year, they need to make sure they drive margin in this Golden Quarter so that investments can be made in their proposition.
“Shoppers are willing to spend if the price is right, and the proposition is strong, so continuing to run as efficiently as possible while steadily improving the experience for customers is key. Much like the last few years, the market is getting tougher, and only those able to continually evolve will thrive.”
