The all-important retail golden quarter has undoubtedly seen a rocky few years.
The impact of the pandemic has been followed by economic uncertainty and high inflation, leading to tightened budgets.
However, with no lockdowns to contend with and inflation beginning to come down, the hope is among retailers that increasing consumer confidence can lead to a bumper Christmas and fruitful 2024.
While things are looking up for the sector, there’s no doubt that traditional shopping habits are changing. Black Friday is a useful barometer for this.
Indications suggest that transaction volumes, footfall and sales were all down or flat this year, as consumers failed to respond to promotional activity and discounts.
This provided a sharp contrast to last year, where shoppers looked out for good deals, in spite of predictions that the cost-of-living crisis would dampen the event.
In fact, our recent survey of over 2,000 UK adults has suggested that people are less engaged with big sales moments this quarter, with over half (57%) saying that they were not planning to take advantage of Black Friday or Boxing Day sales, despite the cost-of-living crisis continuing to be front of mind.
What does this tell us about consumer priorities when prices climb? And how can retailers protect market share and boost sales in the run up to Christmas and beyond?
Cutting back
Shoppers are undoubtedly still struggling financially this Christmas. Our research showed that two-thirds (64%) of UK adults are planning to cut back on their spending – although this is a slight decrease from the 70% who said they would cut back in 2022.
This is spread across the high street, with 44% planning to reduce spending on presents, almost a third (32%) on eating out in the festive period, and 29% intend to reduce spend on food and drink at home.
Many may have anticipated that, in this context, big promotional moments around Black Friday and Boxing Day could have been bigger than ever, as consumers searched for deals to cut the cost of Christmas shopping.
However, in recent years, it appears that scepticism has grown over the genuine value of these deals. As people look to more considered and sustainable shopping, impulse purchases on cut-price items may be on the decline.
Don’t just slash prices
This change in shopping habits calls for retailers to adapt and find new ways to drive sales with shoppers.
Many have responded already by bringing festive trading discounts forwards, stretching promotions across longer time periods.
This gives consumers more time to make considered purchases, and brands more time to bring themselves front of mind ahead of the Christmas shopping crunch.
However, what is arguably more important than steep discounts is giving customers good value for their purchases.
This isn’t just about price – it’s about emphasising longevity or quality of products to help customers justify their purchases while budgets are stretched.
Retailers should also focus on delivering value in a personalised way. Instead of blanket discounts, retailers could leverage data and insights to offer discounts on products that a customer often purchases, or showcasing products they are likely to be interested in based on previous spending.
Value perception also comes from delivering a seamless experience across different channels – from in-store and online experiences, to marketing.
Customers who have a positive interactions with a brand at every point in their journey are more likely to maintain loyalty, throughout the year as well as the festive period.
Black Friday and other golden quarter sales periods can often feel like a race to the bottom, but that’s not how consumers are shopping any more.
Instead of slashing prices to draw consumers in for set days a year, retailers have a great opportunity to develop loyalty for the long haul.
They should be focused on proving that they’re worth people spending money on, particularly in a time where budgets are tight – helping to create a merry Christmas for consumers and brands alike.
Kelly Askew is Accenture’s retail strategy and consulting lead in the UK and Ireland.
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