The Christmas season is a time for family and cheer. But for brands and retailers, the time between late November and early January represents the most crucial — and most competitive — period of the year, accounting for up to 30 per cent of annual sales.
As journalist Katharine Whitehorn once said, “from a commercial point of view, if Christmas didn’t exist it would be necessary to invent it”.
But the way that consumers approach the festive period is changing. Last year, the British Retail Consortium reported that retailers had their worst Christmas in a decade.
The Office for National Statistics attributed this drop in sales to Black Friday, as consumers chose to spend more during the high-profile November sale. This is supported by research from McKinsey which shows that just 19 per cent of UK consumers participated in Black Friday in 2015 — but by 2017, this had soared to 54 per cent.
But changing habits do not equate to less spending. In fact, research shows that almost a third of shoppers expect to spend more this year than last — with millennials showing the greatest desire to increase their budgets.
For brands and retailers, understanding these changes and how to leverage them is paramount to success, particularly with this audience. So how are millennials shopping this year?
Increasing spending power
Let’s begin by dispelling some myths. While millennials have had it worse off than previous generations, that doesn’t mean they’re penniless. In fact, as millennials grow older, they’re starting to out-earn their parents.
Millennials now have an average household income of £40,000, slightly above the £36,000 for Baby Boomer households. They’re also maturing in other ways: 80 per cent of millennials are employed, 58 per cent are married or in a domestic partnership, and 44 per cent are parents. And for brands, that means they’re an increasingly important audience to engage.
As the first digitally native generation, it’s unsurprising to find that millennials are the most comfortable with buying online.
According to Google’s own research, they spend 60 per cent of their shopping time online, and are outstripping both Generation Z (56 per cent) and Generation X (58 per cent). Furthermore, both millennials and Gen Z shoppers said that they shopped online more in 2018 than previous years.
Smartphones are a key driver here. Millennials want information to be quickly and easily available — research shows that a one-second delay in mobile load times can impact conversion rates by up to 20 per cent.
What does this mean for brands? Well, making it easier for millennials to find what they want online can help you convert browsers into buyers.
… and in-store (with some help from their phones)
Even when millennials brave the crowds on the high street, they tend to use online resources to make their shopping trips easier.
Nearly three quarters of millennials (72 per cent) visited a store for their Christmas shopping over a two-day period that we tested last year — a figure comparable to older generations.
The difference? Millennials are much more likely to have searched online (86 per cent) beforehand. Plus, 40 per cent of all shoppers use their phone in-store to help make decisions as they shop.
Therefore, if you help your customers get online quickly with free wifi that is easy to access in-store and make information about inventories, locations and deals easy to find, you’ll benefit from these better-connected shoppers.
Millennials want as much information as possible — but they can’t research everything alone. Retailers should ensure that all marketing material is available early to assist shoppers on the purchase journey.
More gifts to buy
Both millennials and members of Gen Z spend most of their shopping time over Christmas buying for others, including their parents (23 per cent and 32 per cent respectively), siblings (16 per cent and 23 per cent) and friends (20 per cent and 24 per cent).
However, they also have younger families to consider. One in five millennials (21 per cent) also buys for their children.
It’s a growing trend — over a quarter of millennial and Gen Z shoppers say that they have more gifts to buy (27 per cent for both) and more people to give gifts to (28 per cent and 25 per cent) this Christmas than in previous years.
Of course, while habits are changing around the festive period, the opportunity for retailers remains the same. By understanding how new generations are browsing and buying this season, retailers can make themselves as helpful as possible — and reap the rewards.