Is it too early to use the C word?

For most it’s probably too early to start writing your Christmas wish list to Santa, the festive period has certainly started cropping up in the business world. My colleagues have already started creating and booking Christmas campaigns for their clients. Recently I’ve come across a few articles about brands such as Dior and The Body Shop unveiling their Christmas collections in September.

Another company that started early was Asda, starting their Christmas promotions four months before the big day. In August they opened 17 grottos at stores around the UK (the grottos were only open for a few days). Staff dresses as elves handed out Christmas savings cards; the cards allow customers to save up to £144 to spend over the seasonal period.

Before forecasting what Christmas 2012 has in store, let’s recap 2011.

  • It was a tough year financially
  • The weather impacted fashion sales – it was particularly warm towards the end of last year
  • Unemployment and redundancy threats impacted purchases
  • Consumers wants a good time
  • Subsequently, consumers spent record amounts in the last 2 weeks of December

Unfortunately, I don’t think we will see any drastic changes for 2012. Financial concerns such as the housing market to the cost of fuel have continued throughout 2012. A year on and we still can’t control the weather, who would have thought that there would be floods in July? Job stability and unemployment is still a concern for a lot of people. On the positive side we still want a good time. It’s the only time of year that we can treat ourselves, friends and family without the burden of feeling guilty.

Now for the good bit……presents!

Whilst I love Christmas (in December, I’m not one that gets all excitable in October unlike some I know) I accept that it tends to be focused around children. So I was surprised to find out, in 2011 toys and games only accounted for 12% of gifts given. Clothing and footwear were the most popular presents and accounted for 17% of gifts given.

Spending on gifts by category, Christmas 2011

Source: GMI/Mintel, Base: 1874 adults aged 16+

  1. 17% Clothing & Footwear
  2. 15% Other
  3. 13% Electricals
  4. 12% Toys & Games
  5. 8% Jewellery
  6. 7% Vouchers
  7. 7% Perfume/Toiletries
  8. 6% Video & PC Games
  9. 5% Books
  10. 5% Music/DVD’s
  11. 3% Household
  12. 2% Experiences

The data in the graph below represents the figures for 2011; the answers are similar to those for Christmas 2010. On the positive side, fewer had to borrow money in 2011 than in 2010. More left shopping to the last minute but far more started early to spread the cost.

The use of Christmas shopping online has increased year on year since 2007. The biggest online shoppers are the 35-44 age group, they are also the group with the most people who bought the majority of their gifts online (rather than some of them). The younger generation lead the way when it comes to new technology, and are the most enthusiastic group when it comes to buying through their mobile. The internet isn’t just used to buy gifts online; a lot of consumers use the web to inspire them for gift ideas.

The festive period is crucial for many businesses, for some the majority of their annual turnover is generated from the Christmas period. If we take household electrical appliance retailers, the sales of white goods are generally purchased as replacements, but brown goods (smaller appliances) and pc related goods are gift items purchased for Christmas. Multi retailers such as department stores also flourish in the festive season; they offer consumers the convenience of purchasing a variety of gifts from one store.

The run up to the festive period is the one time of year that consumers are all looking to purchase gifts. This means the competition between retailers advertising their products is at a peak. According to Nielsen in Q4 2011 £6,352,735 was spent on advertising locally in Wales, compared to £5,555,410 spent in Q1 2011. The industry that spent the most on advertising last year in Q4 was Entertainment and Leisure; some 30% of their total advertising revenue was spent in this period.

It goes without saying that it’s not only retailers that benefit from the Christmas season. Not everyone wants to spend all day in the kitchen or squeezed together on the sofa! The hospitality and catering industry do particularly well in the run up to Christmas. Not only do they benefit from those that want to eat out around the Christmas period, but also with office parties and of course New Year’s Eve.

If you haven’t already started to plan for your business and the Christmas period, then it’s time to start. Other companies (and probably your competitors) already have. If you combine that with the rising number of consumers starting their shopping early, the expression snooze you lose comes to mind.

The Little Nuggets (Welsh Average)

32% find it difficult to say no to their children

13% tend to spend money without thinking about it

50% like to pay cash for everything they buy

74% spend money more carefully than they used too

Source: GB TGI Radio+ 2012 Quarter 2, Kantar Media, Wales BARB region

As always please leave a comment below, email me or tweet me @realradiojodi

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