UK retailers set for holiday spending boost despite consumer caution

After a turbulent year for retail, Shopify's latest Holiday Retail Report brings welcome news for UK businesses. The UK is the only international market where consumers are expected to increase their spending significantly during Black Friday and Cyber Monday 2024. The report reveals a projected 21 percent rise in average spending per shopper, increasing from 131.67 pounds last year to 159.22 pounds.

However, the research—based on a survey of 18,000 consumers across nine countries—cautions that this spending surge will be far from extravagant. With 83 percent of UK shoppers comparing prices and 65 percent planning to buy during sales, value-conscious shopping remains paramount.

Deann Evans, Managing Director, EMEA at Shopify, highlighted the importance of this moment for retailers, stating: "After a difficult year, our findings offer a beacon of hope. Brands now have an opportunity to close the year on a high by tapping into consumer sentiment, especially among younger shoppers (25-34), who are set to drive this increased spending."

Discounts drive sales, but free shipping matters

While discounts remain a key factor for 50 percent of shoppers, free shipping and returns have become increasingly important, with 42 percent citing them as crucial for brand loyalty. Shipping costs, lack of discounts, and slow delivery times are among the top reasons consumers abandon purchases, underscoring the need for retailers to offer seamless and cost-effective shopping experiences.

Social media shopping rises, but Facebook declines

Younger shoppers are embracing social commerce, with 59 percent of 18-24-year-olds purchasing through Instagram and 62 percent via TikTok. However, Facebook's appeal continues to wane, with only 23 percent of young shoppers likely to buy through the platform, down from 25 percent last year. The research also suggests a growing preference for independent brands, with 21 percent of consumers seeking more personalised shopping experiences.

Evans emphasized the need for retailers to balance price competitiveness with a frictionless experience, especially as brand loyalty peaks among shoppers aged 25-44.

In-store shopping makes a comeback

The hybrid approach to shopping is thriving, with 44 percent of UK consumers planning to split purchases between online and in-store channels. Notably, 61 percent of shoppers research online before making in-store purchases, while a significant portion (33 percent) expects to do most of their shopping online. This trend highlights the importance of retailers maintaining a consistent and integrated presence across both physical and digital platforms.

Looking ahead, Evans urged businesses to stay agile: “Retailers must meet consumers wherever they are, whether online or in-store, to maximize the potential of the holiday season.”