The heating is coming on and the kids are back at school. To those of us working in e-commerce, that means it’s time to make sure we have all our plans in place for Christmas shopping. E-commerce has struggled this year, particularly in January and April, but what are experts predicting for the rest of 2024? And how can you use that information to make the most of the golden quarter?
Increased Confidence Amongst Higher Earners.
Researchers at Retail Week have looked at the economic climate and how this might impact on shoppers’ confidence and spending power. They believe that consumer confidence is gradually improving, especially amongst those with the most disposable income to start with.
Those of you selling to higher earners may see your customers use Christmas as an excuse to splash out on luxury goods. Fashion, jewellery and fragrance retailers including Sosandar, Pandora and The Fragrance Shop, all reported healthy year-on-year growth last year and expect more of the same.
How could you make the most of customers who are more inclined to purchase luxury products at this time of year?
Cautious Optimism Where Spending Power is Challenged
Analysts believe we are through the worst of the cost-of-living crisis and into a phase of “cautious optimism”, but customers with lower disposable income are still buying carefully. This is particularly true of the “aspirational millennial” group of 30–40-year-olds who are often struggling with higher mortgage and loan rates.
Rather than trading down to cheaper brands, these shoppers appear to be staying loyal to their favourite retailers but reducing how frequently they buy. This loyalty is partly driven by an affiliation to the brand, but also by a desire to only spend on quality, durable products.
Retail Week advises brands who serve these customers to take advantage of this loyalty, but to be prepared for their customers to be more financially challenged this year.
Little Indulgences
In 2023, the Health and Beauty sector did particularly well from sales of “little luxuries”. This was seen as a form of retail therapy, to counter all the bad news in the world.
This year, the trend for purchasing small treats is predicted to extend into luxury food and drink, sentimental gifts and other areas. Whether as a stocking filler for someone else, or a small self-purchase, can you make sure you have a good selection of “little somethings” prominent on your site and sales channels?
How Will Different Sectors Perform?
As in 2023, Health and Beauty is expected to be one of the major performers this season. Social Media activity, especially TikTok, is proving a strong driver, and trends to look out for include “natural skincare”, “gentle beauty”, vegan and sustainable options. Own brand products, such as Boots Natural Collection, are also helping many health and beauty sellers to improve margins and drive growth.
Homeware sales are also predicted to grow, partly because imported products are slightly cheaper than this time last year. Trends that should do well include Christmas decorations, sustainable products, seasonal lighting and lower ticket items such as soft furnishings that help smarten up homes when people choose to “improve not move”. Eco-friendly packaging, such as the sleeves we stock from Flexi-Hex® are ideal for packaging these type of items.
Fashion retailers have had a rocky time recently. Many have cut back and now offer a more streamlined range, with services such as “try before you buy” to help increase sales. Things are improving, but shoppers are definitely looking carefully for the best products at the best prices. The quality of the brand and item are often more important than whether it comes from the current season. This has led to growth in the pre-loved market, through platforms such as Vinted and Ebay.
Electrical items and gadgets also struggled last year, but this sector does well from Black Friday deals. This year is predicted to continue that trend, with offers starting early. Gaming products are expected to be popular, as well as products that promote sustainable living.
Toys and games always sell well at Christmas, as parents prioritise buying gifts for their children over other purchases. This year, the “kidult” market, for children over 12 years old, is particularly highlighted as providing opportunity for growth.
Could you take advantage of any of these trends with products you sell?
Subscriptions and Loyalty-Led Pricing
Membership and subscription schemes have both been powerful marketing drivers for retailers this year. Supermarkets and our clients Boots use loyalty cards to offer discounted prices whilst online retailers such as The Fragrance Shop, Lemonade Dolls and our clients H&M, are pushing membership pricing and subscriptions as a way to increase lifetime value.
Other retailers, such as John Lewis, use membership schemes to push personalised offers, in-store treats and special access to events and product launches.
If you are offering memberships, then are you using the data provided to target and personalise promotions, making offers more appealing and more likely to convert?
When Will People Shop?
Last year, nearly a fifth of consumers started buying gifts in October to help spread costs. Many retailers, including Amazon, offered deals earlier than usual to take advantage of this. According to the IPA, parents of younger children are more likely to shop early, but almost a third of shoppers expect to still be gathering gifts in December.
This year Black Friday is on November 29th, which is closer to Christmas than before and coincides with payday for many shoppers. The most common marketing message for Black Friday over the last 3 years has been a discount on “selected products up to”, rather than a site-wide offer. Younger people are more likely to take advantage of Black Friday deals and may spend at least a quarter of their shopping budget during this time.
Is your marketing plan timed to make the most of these patterns of purchasing?
Social Media as a Sales Driver
Whilst we have already mentioned TikTok as a driver for beauty sales, Social Media is going to be important across the age demographics this year. Social channels are now the second most influential platform for people looking for shopping inspiration, whether it is “BookTok” sending people to Waterstones, home styling inspiration on B&Q’s Facebook page or sparkly things on Instagram pushing gift buyers towards Pandora.
Is your Social Media optimised for promoting sales?
How Can Forms Plus Help You Prepare?
At Forms Plus, with over 40 years in business, we’ve possibly been helping retail clients trade through the hectic festive season for more Christmas’s than you remember! We stock a wide range of mailing supplies, protective packaging and labels, including plenty of sustainable options. This means that we can meet the needs of all kinds of retailers. Our friendly team of experienced staff are always happy to help you make the best choices for your business.
Do have a browse of our products today and get in touch if there is anything we can do to help you prepare for what we hope will be a busy and profitable season ahead.