Understanding current market trends and shoppers’ behaviour is important for online retailers at any time of year, but during the Christmas run-up, which is potentially the most lucrative time of year, it is even more vital. We will examine the latest retail reports. In this post, we provide some of the most interesting facts about Christmas shopping and explains what this means for online stores.
- Online spending hits record high
Despite the cost-of-living crisis, Adobe Analytics predicts that in 2023, consumers will spend an eyewatering £175 billion online during the run-up to Christmas. The figure last year was £170 billion. This continued growth means that online retailers should be prepared for increased sales and the accompanying growth in traffic. In other words, make sure stock levels are good and ensure your web hosting can handle the number of visitors your site might get. - Shoppers buying early
While more money is being spent, shoppers are buying their presents earlier, perhaps as a way to minimise the impact of Christmas shopping on stretched budgets. According to ConsumerWise, many now start buying for Christmas at the start of November, well before Black Friday. Stores wanting to make the most of this prolonged run-up will need to start getting their websites, stock and promotions ready earlier if they are to benefit. - Consumers want better value
Perhaps another impact of the cost-of-living crisis is that, according to McKinsey’s Holiday Shopping in 2023, almost 80% of shoppers are looking for value this Christmas. This indicates that consumers are making more economical choices when buying gifts and other seasonal products. While margins are already tight for online stores, they may need to consider offering even more competitive prices to attract cost-conscious shoppers??. - Gen Z want quick delivery
When it comes to delivery times, patience isn’t a virtue that many Gen Zs possess. The McKinsey report mentioned above also shows that those aged between 11 and 26 have increased expectations for same-day and next-day delivery. The good news is that they are willing to pay more for it, but this still means that online retailers need to have these options available if they are going to attract this younger cohort and keep them loyal. The big issue here, certainly over the last couple of years, is that so many online packages are sent at this time of year, that logistics companies themselves can struggle to meet delivery timescales. - Growing influence of social media
According to the Royal Mail’s annual Delivery Matters study, the number of shoppers who purchase items after seeing posts or comments about them on social media has grown from 15% in 2019 to 25% today. This figure is even higher for younger shoppers, with nearly half of 18-34 year olds being influenced by social media. For online stores, this highlights the importance of having a strong social media presence during the Christmas run-up, especially if you want to engage with younger consumers. - Popularity of ‘buy now, pay later’
With personal finances stretched and the cost of borrowing from the bank at its highest for decades, 36% of UK shoppers now use ‘buy now, pay later’ services for purchasing goods – up from just 12% in 2021. The figures for younger consumers are even higher: 55% of Millennials and 43% of Gen Z use it. During the Christmas run-up, when many are spending more than they have coming in, these flexible payment options are highly valued by consumers. As a result, online stores that offer these payment options are likely to attract the growing number of customers who need to spread the cost of Christmas. - People still love a shop
While buying online can offer shoppers convenience and lower prices, stepping out of the cold and into a warm store that’s dressed up for the season, plays Christmas songs in the background and has row upon row of festive products beautifully displayed is one that many shoppers find irresistible. In fact, 85% of consumers still shop in-store at Christmas. If online stores are to compete with this, then decking out your website to make it look as festive as possible is vital to give shoppers that in-store feeling online.
Conclusion
While people will always spend a lot at Christmas, the ongoing cost-of-living crisis means shoppers are changing their habits in 2023. They are buying earlier, looking for better value and want to spread the cost with flexible payments. At the same time, the competition from physical stores remains strong, and younger shoppers want speedy delivery and social media inspiration.
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