Almost two thirds of consumers (63%) intend to spend more or the same this Christmas than previously despite the ongoing challenging economic conditions, according to new research by etailer BrandAlley.
The survey was conducted by independent data processing bureau, Framework, among 2,000 consumers, including some of BrandAlley’s 2.5m customers.
It found many shoppers (a total of 70%) think there will be significant discounts available before the traditional January sales and will be relying on these for their Christmas shopping, suggesting stores which offer early discounts will perform well.
Rob Feldmann, CEO of BrandAlley UK, thinks the key question, as ever, will be which of the big high street retailers will start their sale first.
“For many brands not wanting to detract from their full priced items in store, having an online outlet to offer discounted stock can be the most effective way of securing sales while maintaining the consumer’s experience of their brand on the high street,” he said.
The demand for discounted stock reinforces BrandAlley’s belief consumers are becoming increasingly savvy shoppers, as the survey also revealed 90% said their spending on clothes and shoes has either stayed the same or decreased during the economic downturn.
In addition, 91% of shoppers expect many of their clothes purchases going forward will be made at a discount price, leaving only 9% continuing to pay full price for most items, said researchers.
This suggests while consumers may have less to spend, they have become increasingly focused on how to make their money stretch further, said BrandAlley.
Given 90% have reduced their overall spending, it seems shoppers are looking online for better value, it said. Only one in 25 consumers has reduced their level of online shopping during the downturn, the study found.
This is reinforced by recent figures released by the Office for National Statistics, which showed one pound in every £10.00 is spent online, a share which is more than three times bigger than it was in early 2007.
Feldmann said: “The current economic climate with increasing inflationary pressures has undoubtedly constrained the retail sector. However, as this survey clearly illustrates, consumers are not necessarily spending less but are definitely becoming more savvy in their spending. Discount buying is increasingly becoming the norm and people expect to find the best offers online.”
The survey also found only 16% of consumers plan to go back to the high street once economic conditions improve rather than continuing to do the majority of their shopping online. Respondents said the increase in the cost of high street shopping such as parking, transport and eating out were the main reasons for this.
While this does not necessarily spell the end of the high street, retailers will need to adapt quickly in order to be successful and ensure their high street offering of full price stock is backed up with the availability of discounts online, said BrandAlley.