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Shopping for Christmas - Online vs Store

Wednesday 18 December 2019 Customer ExperienceShopping Behaviour

Emily Clegg's picture
By Emily Clegg

As a Northerner moving to London trying to juggle life in a new city, with a new job and unlimited opportunities to explore, my Christmas shopping this year has almost all switched to online.  For me, online shopping has become more appealing every year as an increasing number of retailers appear online allowing us to shop 24/7, compare prices and save time, specifically during the busy festive period. The occasional Christmas shopping trip in store has been influenced strongly by the experience: unhelpful staff, queues and limited stock being 3 key reasons why I would choose to stay away and would rather risk not being in for a delivery!

More than half of online shoppers purchase in November or before whereas during the same period only 19% of in store Christmas purchase take place.

CACI

In the busy festive period physical locations need to consider some of these challenges otherwise they run the risk of losing out to online. CACI data explores the dynamics of online shopping and found the annual variation of online shopping has become increasingly pronounced with the run up to Christmas seeing the best online performance, starting to mirror brick-and-mortar retailers. Although patterns of purchasing are becoming more aligned between on-and-offline platforms, the peak spends are at slightly different times, with in store purchases peaking later in the year. More than half of online shoppers purchase in November or before whereas during the same period only 19% of in store Christmas purchase take place. Traditionally retail promotions increased steadily from mid-November, however, more recently the retailers have launched promotions on Black Friday and returning to full price just before Christmas. The earlier spike of online spend reflects the fact that these events have a high online presence where as last minute purchases tend to be in store.

On average online spend in the UK now accounts for 20.3% of total consumer spend, with half of this touching a store at some point, however during the Christmas period this increases to 42%. The Royal Mail revealed the UK accounts for the greatest spending market in Europe, with the average person in the UK spending £300 online during the Christmas period. Therefore, it is more important than ever to understand who your customer is specifically at Christmas time and how to encourage typically festive online shoppers back in store.

Festive Online Shoppers

The growth of online shopping has been influenced by technology advancements, coinciding with the growth of the tech-savvy generation. CACI Peak Period Shopper dimensions revealed the age group most likely to shop online during the Christmas period are now the 25-34 year olds. This growing group of online purchasers include time-poor parents, who with their fun-filled family festivities alongside their everyday hectic lives and have limited time to visit the high street to get everything on their children’s wish list.

Using CACI’s Acorn classification, other groups favouring online shopping during the festive period are the money-rich and time-poor Executive Wealth and Career Climbers, who are wrapping up their end of year deals whilst also organising their Christmas celebrations! Conversely, those less likely to shop online are Poorer Pensioners, Difficult Circumstances and Struggling Estates. Currently the 65 plus age group are 20% less likely to shop online than the average shopper, creating further scope for growth.

The geography of these demographic groups is likely to be influential in the geographical divide of online spend, with those in Northern Ireland and London being the most likely to purchase online where as those living in the North East of England are the least likely. However, it also must be considered that online sales are 106% higher within a store catchment and London has a much broader and densely populated retail offer than the North East.

There is also a gender divide of peak online spend with men spending on average £304 compared to women at £271. This pattern is carried through to Black Friday and Cyber Monday, where women on average in 2018 spent £28 less than men. Men’s higher online spend is reflected by the type of purchases they make. 2/3 of men take advantage of Black Friday to treat themselves to lavish gifts whereas 2/3 of women take the opportunity to focus on gifts for their family. Despite men spending more online, shopper dimensions revealed women shop online more frequently. Shoppers who do shop online more frequently, also purchase more often in a shopping centre during the festive period. This is reflective of the type of good purchased, with consumer electronics fashion and sportswear being common gifts and exerting a halo effect of 120%. Online shoppers also spend £20 more in store than those who do not purchase online and are 4% more likely to use click and collect, showing that their interaction with a brick and mortar store is much more valuable than a purely in store shopper. Additionally, the fact that 90% of customer spend still touches a store would suggest that online is not seen as a substitute for brick-and-mortar but is a driven by it.

90% of customer spend still touches a store

CACI

Although online festive sales are growing, and becoming increasingly important with the larger proportion of tech-savvy shoppers, the Halo effect demonstrates that physical store presence is driving this and online shoppers on all paths to purchase are more valuable. Therefore, it’s more important than ever that brands offer a strong in-store experience and a seamless omni-channel offer over the Christmas period to drive sales both online and offline.

At CACI we are able to provide greater insight into the future challenges and opportunities posed by the changing face of retail. For better understanding of your customer and how you can continue to attract them during this transition into a more omni-channel offer get in touch today!

As a Northerner moving to London trying to juggle life in a new city, with a new job and unlimited opportunities to explore, my Christmas shopping this year has almost all switched to online. For me, online shopping has become more appealing every year as an increasing number of retailers appear online allowing us to shop 24/7, compare prices and save time, specifically during the busy festive period. The occasional Christmas shopping trip in store has been influenced strongly by the experience: unhelpful staff, queues and limited stock being 3 key reasons why I would choose to stay away and...

Shopping for Christmas - Online vs Store