Festive shoppers show restraint but research reveals hope for retail resurgence

Consumers are displaying caution in their spending this holiday season, according to research from Capgemini.

7,543 people were surveyed across the UK, US, Germany, France, Spain, Netherlands, Sweden, Finland, Norway and Denmark. 38% are spending less on holiday shopping than they did last year.

This is mainly down to a decrease in disposable income (24%) coupled with ongoing Covid-19 restrictions (22%) – such as lockdowns forcing non-essential retailers to close stores – and people giving fewer gifts because they’re seeing fewer family members (20%).

As a result, 48% of holiday season purchases are for essential items, with consumers prioritising clothing (36%), beauty/personal care products (21%) and electrical items (21%).

People are also embracing new formats. 24% say they have shopped more locally this year than in previous years and 48% have bought more items online this festive season than ever before.

While 26% of those surveyed had never shopped online before the pandemic, 45% are now more comfortable with this format and 48% say they will purchase items online more in future.

63%, meanwhile, would like to return to their previous habits once the pandemic is over, with 59% stating that they miss the in-store experience. But consumers don’t want the innovations retailers introduced during the pandemic to be forgotten.

New technologies which were brought in to mitigate the risk of Covid-19, such as contactless payments and self-service kiosks, encouraged 44% of those surveyed to venture in-store. Now, three in five want these to remain in the future.

“While it’s been a year of challenging adaption and experimentation for retailers, there is certainly hope for a resurgence as we settle into the new normal,” says Tim Bridges, Global Head of Consumer Goods and Retail at Capgemini.

“Physical retail has a long-standing place in the hearts of consumers and they will return to stores when they feel it is safe to do so, but the pandemic has also exposed retail to new customers who hadn’t previously shopped online.”

“2020 has been a year of extraordinary disruption, but we have also seen significant resilience, creativity and innovation in retail. As our previous study showed, many swiftly adapted to the preference – or necessity – of presence-free shopping. 93% of retailers took deliberate steps to bolster their online offering and one in five introduced new virtual shopping experiences,” he adds.

“Whether shopping returns to the old normal or embraces the new, retailers must continue to innovate and evolve. Understanding and anticipating customer demands is critical, creating experiences that feel safe, convenient and personal - whether online or in-store.”