As the holiday season approaches, Adobe's first-ever Christmas Shopping Forecast in the UK provides valuable insights into the trends that will mold consumer spending during this festive period.
Positive surge in UK online retail spending
After a two-year hiatus, the UK is poised to experience a significant uptick in online retail spending this holiday season. Adobe's forecast predicts a robust 24.1 billion pounds spent online from November to December, marking a 2.7 percent year-over-year growth.
The BNPL boom
The Buy Now, Pay Later (BNPL) trend is set to play a pivotal role in driving holiday spending, with total BNPL expenditure expected to reach 18 billion pounds this year. Consumers' growing reliance on this payment method is evident, with a forecasted 3.7 billion pounds in total online BNPL spending during the holiday season—an 8.8 percent increase from the previous year. The BNPL surge is not exclusive to the holidays, as 13.5 billion pounds has already been spent in 2023, showcasing a 16 percent year-over-year increase and a remarkable 1.9 billion pounds more than the same period last year. Adobe anticipates the BNPL spend for the full year to soar to 17.2 billion, marking a staggering 26 percent increase from the previous year.
Strategic discounting on key deal days
Retailers are gearing up for strategic discounting to entice shoppers during the holiday season, particularly on Black Friday to Cyber Monday. These days are expected to be the highlight, contributing significantly to sales and revenue. Cyber Week and Boxing Day are projected to grow by approximately 3.7 percent year-over-year, generating 3.8 billion pounds, constituting 16 percent of the season's total revenue. Cyber Monday takes the lead with a projected 5 percent year-over-year increase and an impressive 861.4 million pounds in revenue, closely followed by Black Friday and Boxing Day.
TikTok's e-commerce surge
TikTok's emergence as a formidable e-commerce player continues to disrupt the landscape, with its share of traffic to retail sites anticipated to grow by an impressive 135 percent year-over-year. In contrast, legacy platforms Facebook and Instagram are expected to witness a decline of 10 percent and 15 percent year-over-year, respectively.
Consumers embrace affordable alternatives
A notable shift in consumer behavior is the inclination towards affordable alternatives. A quarter of consumers plan to move away from premium or branded products, opting for store brand or value range alternatives. Another quarter is considering shopping at stores offering more budget-friendly prices than their regular supermarkets. Additionally, 24 percent of consumers plan to substitute their usual products with different, more economical items. As the holiday season unfolds, these insights offer a comprehensive view of the evolving consumer landscape, guiding retailers to make informed decisions and capitalize on emerging trends.