Fashion remains a popular choice for holiday gifts, despite the challenges faced by the industry throughout the year. However, consumers are expected to be more cautious in their spending on gifts this season. Two recent studies have highlighted key trends for the gifting season.
One positive finding comes from a survey conducted by Clear Channel UK, which found that Britons are determined to enjoy their Christmas without letting the cost of living crisis ruin it. The survey revealed that consumers plan to spend a similar amount on Christmas gifts as they did last year.
While the number of people planning to spend large or small amounts on gifts has remained relatively stable compared to last year, there has been some change in the middle to upper range of spending. Around 6% of people plan to spend over £1,000 this Christmas, which is the same percentage as last year. Similarly, 11% have budgeted £50 or less for Christmas gifts and 8% plan to spend nothing at all, mirroring the figures from 2022.
However, there has been an increase in mid-range spenders. In 2023, 23% of people have budgeted £101-£200 for Christmas gifts, up from 21% the previous year. Additionally, the percentage of people planning to spend £51-£100 has risen from 16% last year to 17% this year. The most significant change in spending comes from the £401-£1,000 bracket, with 13% of people planning to spend this amount, compared to 16% last year. This suggests that the increase in mid-range spending may be a result of mid-upper spenders scaling back.
When it comes to shopping preferences, only 25% of people plan to do their Christmas shopping online, while 34% plan to shop on the high street. The majority of people (41%) prefer a combination of online and in-store shopping.
In terms of popular gifts for the holiday season, clothing, toiletries & cosmetics, and toys top the list. However, the popularity of these categories varies depending on the gender of the shopper. Women tend to purchase more clothing, toiletries & cosmetics, and toys, while men lean towards clothing, food & drink, and toys.
Contrary to the overall spending trends, another study conducted by the Gift Card and Voucher Association (GCVA) shows that shoppers plan to tighten their budgets specifically for gift-giving due to ongoing financial strains. The study revealed that 44% of UK adults are reducing their gift-buying budgets, with nearly half of UK households in a worse financial situation compared to the previous year. Additionally, 12% of adults have experienced a significant decline in their personal finances.
To manage their Christmas spending, some consumers are choosing to opt for gift cards instead of physical gifts. The study found that 14% of adults plan to increase their spending on gift cards in order to control their gift-buying budgets and avoid wasting money on unwanted gifts. This shift towards gift cards is especially common among Gen Z and Millennial consumers, with 28% of those aged 16-34 more likely to give a gift card due to the cost of living crisis.
Useful links:
1. https://www.bbc.co.uk/news/business-59587036
2. https://www.retailgazette.co.uk/blog/2021/12/one-quarter-of-consumers-only-purposefully-shop-in-physical-retail-in-store-and-one-quarter-only-online
