The market volatility brought by COVID-19 pandemic may have recovered to a certain extent, pointing to a potential surge in holiday spending during the Christmas season. However, Christmas spending sentiments remain the same compared to the previous year.
A study by Borderless Access conducted in the United States and United Kingdom shows that 53 percent of the respondents prefer to spend the same for Christmas as last year. Twenty-six percent of the respondents said they will spend more this year than last year, while 21 percent stated that they will spend less compared to 2022 Christmas.
Prices of items are skyrocketing
In 2023, both the United States and the United Kingdom experienced a significant increase in the cost of living, placing a financial strain on the households. This reality was echoed by the respondents when they were asked the reasons for spending more or less compared to last year.
In the face of escalating prices, an overwhelming 87 percent of respondents in the US and the UK are united in their priority to seek out deals, according to recent research. However, only 36 percent of shoppers specifically in the US are emphasizing the importance of finding deals.
Gifts are the most popular and highly spent category
As the holidays get near, many people get into the spirit of giving. Almost half of the people surveyed (49%) will spend their money on gifts (48 percent from the US and 50 percent from the UK). After gifts, the next popular things to spend money on are food and drinks, with 22 percent in the US and 31 percent in the UK. Decorations come next, with 10 percent in the US and 7 percent in the UK.
When it came to shopping preferences, the majority of respondents in the US, accounting for 61 percent, preferred buying gift cards or vouchers, with clothing and footwear following closely behind at 54 percent. In the United Kingdom, confectionery takes the lead, with 64 percent of respondents opting for sweet treats, closely trailed by clothing and footwear at 63 percent. These contrasting consumer preferences highlight distinct trends in purchasing behavior between the two countries.
In the US, a dominant 52 percent of respondents prioritize sales events and promotions as the leading influence on their Christmas spending , closely trailed by recommendations from friends and family at a significant 50 percent. In the United Kingdom, 45 percent of participants pinpoint the gift recipient as the primary influence guiding their Christmas purchases, while family and friend recommendations, along with retailer loyalty and rewards, share the second spot at 35 percent each.
Festive cheer goes digital as online christmas shopping takes the lead
Festival shopping, traditionally linked to physical stores, is undergoing a transformation as customers increasingly favor a hybrid shopping experience. Online shopping not only offers convenience and time savings but also provides a wider variety and exclusive discounts, particularly during festive seasons, while physical stores may become overcrowded, impacting the shopping experience.
As per our study, overall, thirty-seven percent prefer a predominantly online approach, complemented by some in-store purchases, showing the growing influence of digital platforms in holiday shopping. Twenty-five percent of the overall respondents opt for a primarily in-store experience with supplementary online purchases. Striking a balance, 29 percent of the collective shoppers evenly distributed their Christmas shopping efforts between brick-and-mortar stores and online channels. Similar to the overall trend, shoppers in the US (40 percent) and UK (33 percent) prefer online Christmas shopping mostly and occasionally in stores.
Seventy-seven percent of the respondents prefer mass retailers like Amazon or Best Buy for Christmas shopping. In the USA, 76 percent prefer mass merchandising stores like Walmart. Target and Tesco, while 84 percent of the respondents in the UK prefer e-commerce websites like Amazon and Best Buy for Christmas shopping.
Amazon is the most preferred website for shoppers
Amazon is the top choice for shoppers, with 91 percent of the overall shoppers preferring it as their first shopping option. In the United States, 91 percent of shoppers favor Amazon as their primary website for Christmas shopping, followed by Walmart (52 percent) and eBay (26 percent). Amazon remains the favorite in the UK as well, with 90 percent of shoppers considering it their go-to destination for Christmas shopping. In the UK, 36 percent of the shoppers give preference to eBay and Argos as their second preferred choice for Christmas.
Such varied preferences underscore the evolving dynamics of consumer behavior during the festive season, where the convenience of online shopping and the traditional charm of in-store experiences intertwine to shape the overall Christmas shopping landscape.
Diverse timelines for festive shopping
Overall, 31 percent of shoppers prefer to shop for Christmas a month before the festival (mid-November to 20th November ), while 29 percent prefer to shop in early December (1st to 10th). Thirty-eight percent of the respondents from the US prefer to shop for Christmas from 15th November to 30th November.
However, 33 percent of the respondents in the UK prefer to shop for Christmas in early December. A significant proportion, 48 percent overall (52 percent in the US and 44 percent in the UK), intends to await Christmas promotional deals before making any plans or purchases.
Increase in digital budget making brands pivot toward the virtual mediums
In the digital ecosystem, media budgets are on the rise, with a noticeable trend of brands reallocating their marketing budgets towards digital platforms. This shift is seen in the heightened investment in social media advertising on platforms such as Meta, exerting a significant influence on consumers within the digital sphere. Social media platforms have become a great medium to get inspiration for shopping ideas as they offer visually rich and interactive space to understand trends, product reviews, and personalized recommendations.
Our study reveals that 48 percent of the overall respondents turn to Facebook as their primary source for Christmas shopping ideas, with Instagram favored by 33 percent and YouTube by 30 percent. In both the US and UK, Facebook takes the lead, commanding 56 percent, followed by YouTube at 34 percent, and Instagram at 31 percent as the leading sources of shopping inspiration.
Conclusion
While market recovery shows a potential uptick in holiday spending, Christmas sentiments remain consistent, influenced by economic factors. The rising prices and shifting preferences reflect the resilience and adaptability of holiday shopping behaviors in the changing ecosystem in the US and the UK.
Methodology: This analysis is derived from a methodologically robust survey conducted in the US and UK showing a demographically balanced sample of adults aged 21 to 50 years and above. This research reveals distinct spending patterns for Christmas 2023, providing valuable insights into consumer preferences and economic trends during the festive season.
