Price remains a significant factor in spending decisions this festive season, with nearly two-thirds of Brits (62%) maintaining or reducing their budget compared to last year, according to new Accenture research.
Feeling the squeeze, shoppers are tightening their purse strings yet again, with consumers planning to spend on average 11% less than last year. To manage festive spending, 41% are setting strict budgets and 36% are searching for promotions, while nearly half (45%) plan to delay their shopping until November and December.
As shoppers seek more economical ways to gift, the research shows that one in five (20%) UK adults plan to buy presents second-hand from resale platforms, such as Vinted or Depop, or from charity shops. This trend is even more pronounced among Gen Z, with 25% incorporating thrifting into their festive shopping plans.
Stuart Chalmers, retail lead for Accenture in the UK, said: “It will be another tricky festive season for retailers this year. Not only will they need to navigate consumers who continue to be cautious with their spending, but they must account for a developing shift in shopping behaviour, especially amongst Gen Z and Gen Alpha. These younger generations are embracing ‘lifestyle commerce’, which offers seamless shopping experiences and dynamic, consumer-driven marketplaces often found on social media platforms.
To meet sales targets, retailers must understand that shoppers are increasingly moving towards digital channels, and resale platforms, not solely for financial reasons, but because they prefer the experience. More than ever, it’s crucial for retailers to understand the underlying motivations behind these behavioural shifts and adjust their strategies to accommodate the changing landscape.”
Experience based gifts on the rise
Many consumers are moving away from material gifts altogether in 2024, opting for more specific experiences instead. Nearly half (48%) of shoppers said experience-based gifts, like travel and entertainment would allow them to do something unique.
Brits are at the forefront of this trend, with 67% considering buying experiences for family and friends this season – one of the highest out of all the nations surveyed, including France (36%) and the USA (57%).
The most popular experience Brits plan to gift is entertainment, such as concert or theme park tickets (49%), followed by travel (44%) and wellness, like gym or spa and yoga retreats (43%).
‘Buyers’ block’ turns shoppers to gift cards
With UK festive shoppers overwhelmed by the amount of information they need to sift through when buying a gift (76%) and 77% overwhelmed by the number of options, weary shoppers are turning to gift cards to solve their ‘buyers’ block’ – with over half of Brits receiving one last year.
While gift cards are chosen for their convenience – 71% of consumers cite ease as the main reason for buying them – they may not always be welcome. In fact, 39% of receivers felt disappointed that the giver did not spend enough time to plan a personalised gift. To compound this, the research found that recipients aren’t making the most of their gift cards, with fewer than half using the total balance, and a notable 27% forgetting about it entirely. As a result, an average of £109 per person was left unspent on gift cards in the UK last year.
While the purchase of a gift card immediately translates into revenue for the retailer, unredeemed cards represent a significant missed opportunity for retailers, which could gain new, lifelong customers and incremental sales if used effectively.
Stuart Chalmers continued: “With Brits fed up with receiving gift cards in their current state, there is great potential for a redesign. Building creativity and interactivity into the experience can help evolve gift cards from a last-minute, mind-blank gifting solution, into a thoughtful and personal gift that customers are excited to give, and recipients are excited to use.
Utilising technologies such as gen AI to streamline the gift card redemption process will also go a long way to ensuring balances are not wasted. For example, gen AI can be used to suggest beauty products for cold weather conditions that match the balance of the gift card, while providing personalised advice on how to incorporate into a daily regimen. Done well, they could help retailers and brands attract new and lifelong customers.”
