Customers buy early for Christmas as the cost of living continues to impact, and frugality makes the buying decision even more crucial.
The forecasts for this Christmas and peak period suggest a cautious customer who wants to be careful with their money, buying earlier to stretch budgets and looking for the best deals and the best products for their money.
Research from TopCashback suggests that nearly half of UK adults plan to cut their overall Christmas budgets, spending around £280 less than last year on everything from food to gifts. In a survey of 2,600 UK consumers by KPMG, four in ten consumers said they would spend less on Christmas gifts this year.
Higher prices fuelled by inflation are skewing the figures. Predictions from GlobalData suggest that although total spending will rise by 3.4% to nearly £110bn in the final three months of 2023, shoppers will spend less in real terms.
GlobalData analysts say consumers are set to shop more cautiously and more savvily, looking for bargains and cutting back on the number of gifts they buy, having seen any savings they may have built up since lockdown eaten up by inflation.
Persuading them to buy will be more challenging than ever after a year of the cost-of-living crisis and surging inflation. But, according to research from Shopify, consumers are also willing to discover new brands and products and are eager to use technology to help find them.
Embedding technology into your online offer to create memorable online customer experiences can help to drive up both conversion rates and loyalty, with 40% more likely to buy from or spend more as a result and 20% saying they would be more loyal as a result, according to the Shopify figures. Furthermore, online continues to beat stores as the number one place for consumers to discover new products.
A cautious, deal-hungry consumer
The Shopify research suggests consumers have been budgeting hard, with more than half (53%) putting aside more money each month than in previous years when perhaps they might have splurged more.
They also remain deal-hungry, with two-thirds (66%) planning to spend as much or more during the Black Friday and Cyber Money weekend than last year. This suggests that their Christmas shopping will be more discount-driven than ever. What share of that will be gifts is debatable, however. According to IMRG, the online gifts category is already down by 12.5% in 2023, and IMRG predicts an 11% decline in revenue for gifts over Black Friday week.
More worryingly, perhaps, is the fact that research from YouGov and nShift , commissioned by Retail Week, suggests that 80% of shopping baskets are abandoned on Black Friday, suggesting that although the hunt for value drives them, they aren’t necessarily sure when it comes to making the final buying decision and need more help.
Part of the challenge is that although customers are wanting value, they don’t want to sacrifice quality. In fact, the demand for quality has increased, with three-quarters wanting higher quality products that last longer, according to the Shopify study.
How you can help
Helping to surface new products and brands to the consumer remains key for 2023. And, with their limited spending capability, they want to buy right the first time, reassured that what they have bought is not only popular – since gifting, in particular, is always a tough choice – but also good quality.
Social proof messaging from Taggstar can help you deliver on all these counts. It uses the power of the wisdom of the crowd to deliver online experiences that your customers will love. Couple it with social proof recommendations, and product discovery becomes even more relevant.
It works by harnessing the wisdom of the crowd, allowing you to portray to customers what might be popular or trending with real-time, factual, contextual messages that help shoppers make more confident decisions, whether they are looking at your product list page or category pages or have already moved on to your product detail pages.
Gift retailers, including Hotel Chocolat and The Very Group, already use social proof messaging from Taggstar to drive conversion rates for their business, with very.co.uk recently introducing animated messages to grab customers’ attention even faster.
Why there’s still time
The run-up to Christmas will be as hectic as ever, so it might feel like one of the worst times to consider new technology – especially when the stakes are so high. Yet a Taggstar social proof messaging implementation is fast and non-invasive and delivers scientifically tested uplifts in conversion rate and revenues quickly, with statistically significant results in a matter of days for many of our customers and ROI of at least 100%. Can you afford not to have social proof messaging on your list for Christmas?