How shoppers will spend this festive season

Tis the season to be jolly… but with interest rates rising and inflation soaring, many retailers may be wondering just how jolly this festive period will be.

The good news, according to Clearpay’s new Festive Forecast report is that while Brits are undoubtedly being impacted by inflation, shoppers are excited about the festive season – and many are keen to spend.

Clearpay’s Festive Forecast surveyed 1000 Brits, who were nationally representative across age, gender and location, as well as an additional sample of 500 Gen Z and Millennial shoppers. It uncovered a wealth of information about how and when shoppers will spend, and what they’ll buy this festive season.

 The report also confirmed that although the challenges this holiday season are real, the opportunities are vast, as long as retailers understand the shopper mindset.

Festive Forecast findings, at a glance:

• 70% of Brits will be splurging on food and drink
• 51% will be spending on socialising
• Gen Z and Clearpay users are particularly excited about the festive season
• 45% of shoppers turn to family and friends for gift inspiration
• 48% of shoppers would be spurred to spend if an item was on sale
• One in 10 Brits plan to use BNPL

Everyone’s a bargain hunter 

The Festive Forecast confirmed that Brits are feeling the impact of rising rates and inflation, and found that nearly half of consumers (48%) are cutting back on general purchases, while nearly a third (30%) reducing their contribution to their savings account. 

They’re still keen to spend on Christmas, but will be paying more attention to the price than usual: two in five shoppers plan to spend less this Christmas season, and one in five will be looking to purchase less expensive gifts.

Where shoppers are getting gift inspiration

When it comes to gift ideas, family and friends are the top source of inspiration (45%) along with simply being in-store or at a shopping centre (44%). Shopping apps are another important influence, along with shopping catalogues and websites. 

Sales drive sales

Another important shopping cue is discounts, with 48 per cent of consumers saying that noticing an item is on sale would prompt them to purchase, while one in four said sales events like Black Friday would nudge them into buying.   

The appeal of sales, together with the challenging financial climate, suggest that Black Friday Cyber Monday (BFCM) is poised to be a major opportunity for retailers this year, particularly among younger shoppers. 

Fashion comes first

Fashion – from clothing to footwear and accessories – is the most popular gift to buy… and to receive. Brits are also planning to buy gift cards, beauty and wellness products, and children’s toys this festive season.

Don’t miss out on customers

One in 10 shoppers plans to use a BNPL service like Clearpay this festive season, and it’s even more popular among Gen Z and Millennials, with one in five shoppers planning to use BNPL.

And shoppers who purchase more expensive gifts are more likely to use Clearpay. That’s because they see it as a “safe and secure” way to pay and because it “helps with budgeting”. 

So it pays to ensure that Clearpay is clearly displayed and promoted, whether you run an e-commerce or brick-and-mortar store.

For more insights into consumer behaviour during the festive period, you can read the full report here.