Despite more than a third (34 per cent) reporting they are more price sensitive than this time last year, UK shoppers still plan to spend a quarter (25 per cent) of their December pay on Christmas. However, price-conscious customers are becoming more organised, selective and thoughtful about their festive purchases as they feel the pinch from rising energy bills (47 per cent), the cost of housing (42 per cent) and a hike in the weekly food bill (57 per cent).
The report, ‘Christmas 2017: The Modern Shopper’ by SAS has revealed consumers are moving away from impulse purchasing, emotional shopping and panic buying. Only four per cent of shoppers will dash to the high street on Christmas Eve for last minute buys and just 16 per cent plan to shop in the week before Christmas. Instead, over half (55 per cent) are buying the bulk of their Christmas presents in November and the first three weeks of December as shoppers show a stronger tendency for planning ahead and researching gifts online.
“Rather than retailers being forced to superficially react to what is happening over a couple of days, the Christmas shopping period is being extended and giving consumers the opportunity to think more about their festive purchases,” explained Andrew Fowkes, Head of Retail Centre of Excellence, SAS UK & Ireland. “For retailers, all the browsing, research and abandoned baskets that build-up can be combined with an existing knowledge of customers’ habits and preferences to create a huge digital footprint that paints a picture of what is driving customer behaviour. Armed with this insight, brands can make smarter decisions about recommendations, pricing and stock levels to improve the overall customer experience.”
Personalised discounting for savvy shoppers
Given the rise of highly-informed, discount-motivated shoppers, nearly half (46%) would abandon a purchase at checkout if a competitive brand was doing a flash sale at a discounted rate. This combined with use of price comparison sites, means consumers are more likely to change buying decisions at the last minute, adding to complexity for retailers in terms of forecasting demand and getting their pricing correct. Consumers are also allowing more time at the outset to browse for ideas and discover the best offers. Looking for the best deal is the main reason most go online (66 per cent) and more than half of shoppers are now seeking out other customers’ reviews (59 per cent).
The research also shows the effectiveness of a personalised discount when targeted correctly. One in four shoppers say a personalised offer would move them to make a purchase. A further 20 per cent say a personalised offer would improve their brand loyalty, even if they didn’t make a purchase on that occasion. However, poorly targeted offers have the reverse effect – more than 4 in 10 admit they find it irritating to be recommended products they’ve bought as gifts for others.
Those retailers embracing omnichannel analytics can create a more accurate picture of who is shopping for what products, at what time and via what channel. This can drive success with micro-segmentation strategies that create offers to suit individual shoppers.
The modern shopper
Over half (51 per cent) of modern shoppers describe themselves as ‘thoughtful’ or ‘organised’ with 61 per cent carrying out online research or using social media to research gift ideas. Less than four per cent describe themselves as ‘impulse buyers’. Browsing the high street still ranked second for the best source of inspiration, with 40 per cent of shoppers getting their ideas in stores. However, many in this group will still revert to online to try and find those items at a cheaper price than they are in store. Nearly half (48 per cent) also check the availability of a product in a particular store before they shop, suggesting online research will help save time when it comes to making a physical purchase.
There will also be no second chances for retailers that can’t deliver, and they need to use customer insights to carefully forecast inventory and supply chain demands. If an item is out of stock in-store, 61 per cent of consumers would look online to find it but only 18 per cent would start with the same store’s website. And if an item was out-of-stock on one retailer’s website then 45 per cent of consumers would simply go to a different website to find it.
“The price for getting it wrong at Christmas is just way too high and Christmas shoppers now only give retailers limited opportunity to get it right,” concluded Fowkes. “Combining existing data about customer behaviour with real-time insights into a shopper’s digital footprint, will allow retailers to make the most of this critical trading period and find the answers to achieving year-round profitability.”