UK consumers have started their holiday shopping earlier this year, driven by a desire to spread out their spending and find the best value gifts. However, the cost-of-living crisis continues to have an impact on spending over the festive season, with many shoppers worried about how they will finance their holiday purchases, according to the latest EY Holiday Shopping Survey.
The EY survey, which polled 1000 UK consumers on their views and attitudes towards the upcoming holiday sales season, revealed that while 64 per cent 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 per cent of consumers willing to pay full price for important gifts rather than wait for sales.
Festive promotions started earlier this year, with many retailers stocking Christmas goods alongside Halloween products. This prompted early Christmas shopping trips, with nearly half of consumers (46%) beginning their festive shopping before November. However, there is a growing focus on affordability, with more than half of consumers (53%) concerned about affording the holiday season.
To manage costs, 45 per cent plan to use credit, and 40 per cent intend to utilise ‘buy now, pay later’ options. Price is the most critical factor for 48 per cent of consumers when choosing which retailer to shop with, overshadowing other factors such as quality, availability, and promotions.
“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,” said Silvia Rindone, EY UK&I retail lead.
“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, attracting price-sensitive customers with great prices, and clear articulate of the value for the premium parts of their range. 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.”
Bricks and clicks no longer enough
Stores remain key to festive shopping, with 70 per cent 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 per cent planning to shop with online-only retailers, 52 per cent with omnichannel retailers, 45 per cent with marketplaces, and 33 per cent with brands online.
Social shopping; the selling and buying of products directly on social media, is becoming increasingly important, with 20 per cent 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 per cent preferring same-day delivery and 37 per cent next-day delivery, while only 30 per cent prefer to use the retailer's default delivery day.
Additionally, 53 per cent of consumers will find another item to buy to meet the minimum purchase amount for free shipping.
“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,” Rindone added.
“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.”
