Do you remember when Christmas shopping consisted of the Argos catalogue and a mad rush around the shops on the eve of the big day? When advertising channels focused on in-store catalogues, television and expensive print media? Nowadays, marketers are having to rapidly reassess their strategies as consumers spend increasing amounts of time online ahead of the big shopping weekends. With Christmas now starting even earlier, most well prepared companies will have their campaigns buttoned up before the leaves have even begun falling from the trees. The Americanised Black Fridays and Cyber Mondays – huge events both on and offline – are now as much a part of the UK festive build-up as mince pies and mistletoe. And with Christmas marketing budgets being increasingly stretched, marketers are finding that they need to be incredibly resourceful in order to stretch their cash across multiple channels.
Whilst some big brands have reportedly been given huge marketing budgets to try to turn around their fragile fortunes (step forward Morrisons…..) things aren’t quite so straight-forward elsewhere. The need to focus on the increase in consumers browsing and purchasing through their mobile devices is highlighted by Amazon’s Cyber Monday prediction. They claim that one of their busiest shopping hours was the time between 7 and 8am as people spend their commute time on trains and buses making in-roads into their Christmas shopping lists. This rapid shift in focus over the last 5 or so years presents retailers with the opportunity to target and drive customers “in the moment”. Modifying strategy to keep pace with evolving consumer behaviour is likely to be key to a successful season.
And how do consumers fare in all this? Do they really have the money or income to be able to afford an extravagant Christmas?
Recent studies have suggested that the average British household spends – on average somewhere between £350 and £600 on Christmas gifts alone – that’s before we even start on the food, decorations, visits to relatives, extra nights out and so on. The total overall extra cost to a household of Christmas has been estimated at almost double these figures. With pay rises having been out-stripped by inflation for years, people are still feeling like they have less cash in their pockets and Christmas spending is looking likely to be more stretched than ever.
Acxiom’s data shows that median UK household discretionary income – net income minus normal committed outgoings– has nudged down in 2014 to only around £550 per month (and for some UK regions it’s as low as £400). Comparing these figures to the expected December festive expenditure goes to prove just how tough the annual Christmas spending frenzy is likely to be for many families. To further put the financial strain into perspective, figures reveal that the average British household will set aside more for a month of Christmas gift buying than they are likely to put into their long-term savings across the entire year of 2014.
With spare consumer cash at a premium and a retail market that is as competitive as it’s ever been, price-conscious consumers are demanding the best possible deals. Retailers need to be canny, resourceful and most importantly adaptive in order to stand any chance of surviving and profiting from what is likely to be the toughest Christmas yet. The pressure is on.
