As we approach the holiday season, consumers and retailers alike are anticipating christmas consumption trends that will define the end of the year. This year, trends point towards more thoughtful shopping and the search for that special something. In this article, we take a look at how these twists will shape the festive season, from early shopping to indulging in those little treats we love.
Read on to discover the new consumer spending trends.
What will christmas consumption be like?
According to the “Christmas consumption and trends” report by Kantar Worldpanel, consumers spend 12% more per purchase during the Christmas campaign, influenced by the purchase of higher priced products such as alcoholic beverages (+0.9%) and Christmas sweets (+3%).
During the Christmas period, there are many special occasions where consumers share beyond the family. In this context, manufacturer brands have a great opportunity to recover market share against private label brands, especially in events with guests (52%) or children (57%).
It is worth noting the great weight of private label brands in Spain, with a market share of 44%. This growth in the use of private labels is taking place in a context in which consumers have changed their habits towards more economical products, given the decrease in consumers’ purchasing power.
During the Christmas season, with high consumer expectations, the tendency to make purchases in advance continues. Although the Christmas campaign is mainly concentrated in November and December, consumption activities start at the end of September, intensifying significantly from the third week of October and peaking in the weeks of Christmas Eve and New Year’s Eve.
The trend of earlier shopping does not necessarily mean buying in larger quantities, but retailers will need to be the first to position themselves in front of the consumer. This will benefit them to create a positive effect and inertia throughout the season. In addition, Christmas also sees an increase in small shopping baskets, which are more frequent and tend to include more branded products.
Promotions, key to christmas consumption
Promotions are crucial at Christmas (50% of households buy Christmas products on offer), with free gifts being the most popular promotion after direct discounts.
Although 40% of shoppers try new brands for promotions, brands tend to use them more to clear post-Christmas stock than to promote during the season.
Advertising also comes into its own at the end of the year, increasing by 15% between November and December and driven by events such as Christmas and Black Friday. Kantar says that effective advertising can increase the number of shoppers for a brand by 1%. Moreover, its effect is enhanced if coordinated with promotions, especially among the 35% of consumers willing to switch brands.
How will consumers behave?
In terms of Christmas consumption this year, the online channel will play an important role, both in the inspiration and discovery phase and at the end of the purchase process. In fact, online sales grew by 16% last Christmas compared to the previous year.
Packlink’s “Peak Season Report 2023” reveals different online shopping behaviours between generations for this season.
Generation Z prefers convenience (42%) over price when shopping online. This generation is the most likely to consider the variety of shipping and returns options (35%) and the least likely to value price (37%).
Millennials, Generation X and Baby Boomers
Millennials (44%), Generation X (50%) and Baby Boomers (53%) focus more on price and deals, comparing products to control costs.
These consumer groups have different savings techniques depending on their age:
- 44% of under 45s tend to take advantage of promotional events and are willing to pay for premium shipping (72%).
- Those over 45 prefer to set a budget (39%) and look for the best value for money (23%), even using cash to manage their spending.
Trends in christmas consumption
Google sets out the top 3 consumer trends for Christmas.
- Consumers looking for immersive shopping experiences: technology is playing a key role in the shopping experience. Short video formats such as Shorts are being used to discover new products and brands. Augmented reality and virtual reality are also starting to gain ground in the online shopping experience, especially among consumers under 35.
- Consumers are less price-sensitive and in search of small luxuries: The economic recovery and inflation control have made consumers less price-conscious and more inclined to indulge in small luxuries, especially in categories such as travel and beauty.
- More thoughtful shopping: Consumers are doing more research and comparison shopping, with an increase in generic searches and looking for reviews and ratings to make more informed decisions.
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