After lacklustre Christmas trading in 2012, retailers and brands will be hoping for a stronger performance this year. There are some positive signs in place, not least a sharp rise in consumer confidence over recent months and growing column inches reporting improving economic performance. Indeed our own data from the Savvy Shopper Panel suggest around a quarter of us will increase Christmas spending this year.
From the retailer’s perspective, there is definitely more of an air of optimism in this year’s round of Christmas TV ads where we see a greater focus on the magic and sparkle of the festive season, rather than some more realistic portrayals of family life seen last year (you can view this year’s ads here).
A major theme of 2012 was the rising prominence of online retailing as many shoppers sought to avoid busy stores and take advantage of the growing availability of convenient click and collect services. This theme looks set to continue with 37% of shoppers saying they expect they’ll shop more online this year than they did in 2012. However when it comes to the all-important main Christmas food shop, 71% of shoppers say they’ll visit a physical store to carry out the task. 14% say they do it online, while 15% don’t yet know.
We expect tablet computers will play a bigger role in Christmas shopping this year – with household tablet ownership having surged from 28% to 46% during the past 12 months. While only 19% of shoppers tell us they’ll do some Christmas shopping using their tablet, we anticipate many will use them to research Christmas presents and look for inspiration.
What’s in store for 2014?
While we expect a better Christmas for retailers this year, it would be premature to pop the Champagne corks. Granted, consumer confidence has increased substantially during the past 6 months, but we anticipate that for many a reality check will set in once credit card bills start to land on shoppers’ door mats in January.
The consumer recovery is fragile and unevenly distributed. Many shoppers’ financial situations continue to be challenging and job security in large parts of the country, particularly away from the south east, is uncertain.
The truth is that for many families times remain tough and, with inflation continuing to outstrip wage growth, disposable income is not likely to increase significantly for most families any time soon. Ultimately shoppers do not use headlines or politicians’ statements as their barometer of economic performance, but the contents of their own purses.
For retailers and brands it is important to take account of economic improvement and rising confidence, while being careful not to jump too far ahead. Price, or more particularly value, will remain king in the eyes of consumers. The savvy shopper is here to stay so, even as we see an increasing propensity for shoppers to trade up, they will continue to look for outstanding value.