Christmas spending set to spike as more confident shoppers go digital

Digital will play a “key role” in Christmas spending this year, with 40% of physical sales digitally influenced and click-and-collect almost doubling to £2.5bn, boosting sales over the festive season to £42.2bn, according to new research.

Consultancy firm Deloitte predicts £15bn in sales will be informed or facilitated by digital technology as consumers use their phones, tablets and laptops to compare prices and access more information on products and services, as well as make purchases. Ian Geddes, Deloitte’s head of retail, says it will be retailers that invest in in-store technology such as mobile payments and beacons that will reap the benefits.

He adds: “Just as physical retailers have benefited from the growth of click and collect, technology investment in-store will increase the number of shop visitors who buy and how much they spend, as well as help join the online and offline worlds.

“Those retailers that have invested in developing apps may now find that if these are only optimised for use as a separate channel, rather than an integrate part of the shopping experience, they will not be fit for purpose.”

Ecommerce is expected to account for 13% of total sales, up 1 percentage point from last year but equal to 50% of the total sales growth. Overall, Christmas spending is predicted to rise by 4% to £42.4bn, over £1.5bn more than last year.

The forecast is the latest indication that shoppers in the UK are more willing to spend this year following a six-year squeeze on consumer spending. Asda’s monthly income tracker showed family spending reached the highest level since the supermarket began measuring it in January 2007 in October, at £176.

That was up by £8 a week compared to last year and marked the 13th consecutive month of increases in household spending power as discretionary income was boosted by rising wages, falling unemployment and a drop in the cost of “essential items” such as food and fuel.

A separate forecast from Accenture also predicts a festive spending spree, with almost a third (31%) of consumers planning to increase how much they spend over Christmas. A quarter (27%) said they plan to spend at least £250 more than they did last year with more than half (57%) saying they started thinking about Christmas gifts as early as September.

Fiona O’Hara, Accenture UK and Ireland’s managing director of retail, says the extended shopping period provides retailers with new opportunities to drive sales and acquire customers but that they must take a personalised approach.

“With Black Friday and Cyber Monday fast becoming fixtures on the UK retail calendar, retailers have an opportunity to capitalise on these key milestones too. With so much competition, it is more important than ever that retailers switch from a mass-marketing approach to targeted-one-to-one offers,” she adds.

A growing number of retailers are planning Black Friday promotions this year, with Sainsbury’s, John Lewis, Tesco, Asda and Amazon among those to set out their plans. Tesco says it expects Black Friday to account for higher sales than Boxing Day for the first time and is planning discounts of up to 70%.