What Brands Should Expect From Shoppers This Christmas

Christmas shoppers are hitting the aisles earlier than ever this year, pondering what food will go on the table and what will be wrapped under the tree. The nation isn’t suddenly becoming more prepared - consumers remain increasingly conscious about their spending off the back of the cost of living crisis, long-standing periods of economic hardships and general overwhelm at keeping track of ever-shifting price offers and pop-up sales.

Kantar reports that spending in supermarkets to prepare for the festive season is on a high; 14.4 per cent of households added mince pies to their shopping trollies as early as October and 650,000 shoppers bought a Christmas cake at the start of November. 

November saw supermarkets’ sales soar to the highest of 2024 so far reaching £11.6 billion - a 2.3 per cent increase from early October. 

Described by Dom Boyd, managing director at Kantar, as a “Golden Quarter” for brands, the Christmas retail period is a competitive time when ads need to entertain the nation and get audiences talking to drive cut-through and persuade consumers to shop with the brand.

Compared to 2023 retailers are getting the ball rolling much earlier. Boyd recounts that not only are people shopping earlier, but campaigns are starting earlier, becoming “more episodic” in the hopes of capturing audience attention for greater periods of time, with the likes of John Lewis releasing its three-part ‘Never Knowingly Undersold’ series with Saatchi & Saatchi beginning with ‘The Window’, and becoming more “immersive and participatory” such as Waitrose’s ‘Sweet Suspicion’.

Accenture’s research into this year’s holiday spending claims four in ten consumers plan to do their holiday shopping between November and early December, with 21 per cent of respondents sharing their plan to begin before September.

Conscious Spending Habits

While individuals began to buy earlier off the back of economic hardships in search of good deals, research suggests that as inflation levels have eased, consumers will spend more this Christmas in response. However, they will take more time and consideration around their purchases. 

Accenture finds that across the last 12 months, 43 per cent of individuals bought only what they truly felt they needed, suggesting growing caution around spending; one in three people bought lower-priced alternatives in the same time frame - a shift from their usual spending habits.

Such shifts in behaviour continually highlight the on-going economic war further influenced by the autumn budget and inflation levels. Boyd explains how 2024 has been a “challenging year” for consumers with the soberest of budgets. 

“Inflation has only just dropped to a level where people can tentatively trade up the value chain,” he begins. “So expect a year of prosecco rather than champagne corks, own label to take a record share of sales and brands that showcase intrinsic quality and value to do better like M&S, Aldi, and those with excellent premium own label ranges.” 

One strategy stores utlise to tackle such issues is loyalty card schemes. Over time they have incentivised custom through apparent discounts and the Competition and Markets Authority looks into whether such offerings for customers really do what they claim. The watchdog finds that “genuine savings” can be made, averaging between 17 per cent and 25 per cent - showing the schemes are evolving. 

It investigated 50,000 products across Tesco, Waitrose, Sainsbury’s, Co-op and Morrisons that use price deductions linked to loyalty schemes and find “very little evidence” of supermarkets inflating their prices to make promotions look like much better deals. 

Christopher Baird, global head of loyalty at frog, part of Capgemini Invent, says the cost-of-living crisis is “significantly impacting consumers attitude to loyalty” and that brands must demonstrate “clear value across both their core value proposition and member experience”, such as the Co-op shifting to member pricing. 

He argues that despite their proposed benefits, customer loyalty is nowadays much more than transactions and purchase frequency, in which a recent frog survey finds 51 per cent of respondents believe brand values that align with their own is one of the most important factors. 

Shoppers are not only expected to proceed with caution but some are also downtrading to cheaper gifts, setting spend limits and utilising credit, according to Stephen Renou, head of retail experience strategy at VCCP. 

“A recent Mintel study reports that 28 per cent of UK consumers will limit the number of people they give gift to this Christmas season,” he explains. “This is both a threat and an opportunity, especially for lower-priced categories like chocolate, which are more affordable to gift."

Physical Shopping Is On The Up

Varying research results have consistently found that individuals want the ability to shop in-store, meaning that the physical presence for major retailers is still key during Christmas - something John Lewis has recognised in its Christmas campaign celebrating its iconic Oxford Street shop window.

VML’s ‘Future Shopper’ report for 2024 investigates consumers’ habits when it comes to spending and attitudes around it. A key finding reveals a resurgence in popularity for in-person shopping. This doesn’t mean the art of scrolling and purchasing online is dying - over a third of UK retail sales this festive period are expected to still be online. 

In essence, consumers want the option to do both; 64 per cent of individuals prefer a brand that offers physical and online shopping, which the report claims that “digitally native does not always mean digitally exclusive”. 

Off the back of its Christmas campaign ‘Helping Feed Your Christmas Spirit’ with BBH, Tesco is using several instore measures to influence its consumers and visit its stores in person. In an interview with Creative Salon earlier this winter, Alicia Southgate, head of marketing at Tesco, explained all about what the supermarket is doing differently. 

She says the campaign is being brought to life across 150 different UK Tesco stores including live grottos for customers to visit Father Christmas for free alongside the return of its store Christmas Markets where new products from a range of brands will be tried and tested. 

Waitrose is another supermarket giant that plays off the idea of urging in-person activities for its consumers. Its ‘Sweet Suspicion’ murder mystery campaign is being brought to life in several ways. Nathan Ansell, customer director at Waitrose, reveals that the brand is going beyond to involve its customers. The red velvet bauble cake viewers see go missing in the first part of its Christmas ad, true to its televised form, is also missing from Waitrose stores. The new product doesn’t hit the shelves until December 19; however, the dessert’s arrival is teased.

Working with Saatchi & Saatchi, the brand is venturing out to make the public involved with its festive guessing game. Dynamic evidence boards are scattered across the country in busy locations like King’s Cross Station, allowing customers to try and connect the dots themselves. 

According to VML, more consumer demand for physical retail is a good thing because it breathes life back into the world of retail. Accompanying it with online research, it says, is also popular, with 35 per cent of people using their leading marketplace for product research before buying, such as Amazon, emphasising the need for a strong online presence to meander into physical stores.

Appealing To Consumers Directly 

As expected, brands have introduced more personalised, human-centric activations to appeal to consumers in recent years.

Customers are more likely to shop at brands that directly appeal to them - have an element of relatability that they find engaging, whether that being directly addressed in email greetings or feeling involved with the act of scanning a QR code. 

Accenture finds that shoppers more than ever are experiencing “buyers’ block” when it comes to the daunting task of festive shopping; 79 per cent of people wish they could identify the available options that suit their needs more quickly and easily. 

Taboola preempts that personalisation is a key trend that will win customers over this Christmas, 83 per cent of consumers revealing interest in receiving personlised offers from brands, including ads and the use of interactive tools to help them identify with the best products for their needs, based off their personal preferences. 

Cadbury has become a brand that’s Christmas campaign centres around personalisation and the idea of allowing audiences to relate through interaction. Its ‘Secret Santa’ work with VCCP London sees a chocolate postal service ran by recurring character Jeff offering the chance to send a free chocolate bar to a person of your choice - all you have to do is scan a QR code on the interactive poster.

Having first released the campaign in 2022, it continues to proves popular for Cadbury and has driven a 43 per cent increase in annual Christmas sales and an additional £80 million in revenue. As a result, it also earned the brand an IPA Effectiveness Award earlier this year. 

Renou says VCCP’s work with Cadbury’s festive campaigns tap into a “fundamental human truth” that is important at this time of the year: generosity. 

“Highlighting well-known gifting occasions like Secret Santa and Advent calendars helps nudge shoppers to purchase by providing affordable and well-known gifting solutions,” he explains. “Using interactive, personalisable and digital-first assets also helps consumers connect with the brand both emotionally and digitally.”

For Renou, the key element campaigns should possess during the festive period is affordable gifting for consumers who are feeling the pinch, combined with digital innovation and interactivity that doesn’t feel too tech-driven but adds to the essential human experience that is Christmas. 

Boyd highlights that Cadbury’s Secret Santa work is a prime example of a campaign that leaves a “strong feel-good factor” that is entertaining and engaging - and makes audiences want to shop. 

Experts predict 2025 will be a year of continued economic growth in the UK, however, at a rate slower than anticipated compared to the 2 per cent forecast finance minister Rachel Reeves has projected. It’s likely we’ll see much of the same in the retail scope for 2025, finding ways to engage consumers all the while convincing them they’re getting the most for their money.