Shoppers are hunting for energy-saving bargains this Christmas; Gen Z and millennials are going for "Buy Now, Pay Later"

According to new research announced this November by the research platform quantilope, more than a quarter (28%) of consumers plan to buy products to help save on their energy bills this winter, while a third (34%) are looking for basic essentials for themselves or their family.

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Quantilope executives said shoppers today are planning to hunt for energy-saving bargains, including blankets and small space heaters. According to new research announced today by quantilope, the research platform that automates advanced research methodologies, more than a quarter (28%) of shoppers plan to buy products to help save on their energy bills this winter, while a third (34%) will look for basic essentials for themselves or their family.

The rising cost of living is clearly having a big impact, with a quarter of those surveyed abstaining from Black Friday shopping saying that inflation has affected their discretionary spending.

The research platform that automates advanced research methodologies had recently surveyed 400 consumers in the UK (and 400 in the US) to understand more about their Black Friday shopping habits and how they plan to pay for their purchases. 

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A quarter of consumers said they were avoiding Black Friday this year, with the majority saying there is nothing they need to buy on a Black Friday deal (64%). Nearly half (46%) thought Black Friday was over-hyped and one in ten said it stressed them out. 

Alex Hall, Associate Director at quantilope, says. “(Black Friday) is a time when people usually look for deals on gifts for themselves and their families ahead of Christmas. While this still holds true this year, we’re also seeing substantial metrics for those stocking up on basic essentials, items for the household, and even energy-reducing items. This might signal the start of a changed perception about Black Friday.”

The ‘Buy Now, Pay Later’ generations

Additionally quantilope’s research revealed that younger shoppers are planning to use "Buy Now, Pay Later" (BNPL) services – perhaps so that they don’t miss out on any Black Friday bargains that could save them money in the longer term. While around a quarter of all consumers (26%) plan to use BNPL in the UK, this rises significantly among younger generations, with 40% of Gen Z (between age 12 and 25) and 36% of millennials planning to do so.

This is backed up by new research from McKinsey & Company, which indicates that BNPL services are becoming increasingly popular as the cost of living crisis worsens and people turn to shopping on credit. 

It also states that millennials and Gen Z are more likely to use BNPL in the coming months.

“This is further evidence that the current economic climate impacts what shoppers buy and how they plan to pay for it. But what’s really interesting is that as well as people planning to buy on no interest credit services like BNPL as well as credit cards, cash is also still a common form of payment. Despite the rise in contactless payments, one-in-four shoppers in the UK are planning to pay for their Black Friday purchases in cash”, adds quantilope’s Alex Hall.

Retailers face a challenging Christmas shopping season, says KPMG research

Now with a new Prime Minister (yes, another one) ushered in, the economic and political climate in the UK should for the time being calm down and stabilise, we hope, and we can start thinking about Christmas which is just around the corner. 

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In the face of a global economic and financial crisis, this year’s Christmas shopping season could be marred by the rising prices as consumers count their pennies.  But new research suggests Black Friday sales and the World Cup are expected to boost food sales alongside Christmas gift buying despite the cost of living crisis in November and December.

A new research by KPMG/Ipsos Retail Think Tank (RTT) members suggests that while UK consumers contend with rising energy bills and interest rates, retailers face a "challenging" Christmas shopping period, with the health of the sector seeing its biggest "golden quarter decline" since 2011.

The latest assessment revealed the health of the retail sector is expected to decline by two points to 70 points in the final quarter of this year. (See  RTT original report HERE.)

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As reported by Yahoo!Finance on 25th October 2022, that is a drop in Christmas trading not seen since 2011 where growing uncertainty in the European and global markets kept consumer confidence low.

According to the Retail Health Index (RHI), a combination of pressure on margins, rising costs and shaky consumer demand are predicted to produce the difficult trading environment.

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Paul Martin, head of retail at KPMG in the UK commented: "The health of the retail sector continues to slowly deteriorate, and it has been over a decade since we have seen a two point drop in the health index during the vital golden quarter." 

The economic and political turmoil are yet to "trickle down" to consumers, according to Martin, who added that while economic and political uncertainty influence the health of the retail sector, the usual festive boost will not be enough this year to counteract the ongoing issues that retailers are facing with rising costs, squeezed margins and fall back in demand.

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However consumers will still want to enjoy Christmas, with many choosing to spend on hospitality and enjoying time with friends and family.

"Many will be looking to trade down, search out bargains and purchase less – but Christmas is by no means cancelled – despite the mood music around an impending recession," said Martin.

But the RTT noted Black Friday (November 25th 2022) sales and the World Cup (November 20th to December 18th 2022) are expected to boost food sales alongside Christmas gift buying despite the cost of living crisis this November and December.

Brands use Xmas season to better connect with customers

Throughout this festive shopping period, businesses need to deliver a marketing strategy which delivers a personalised brand experience, according to Massimo Fubini CEO and founder of Contactlab (1) .

He said brands can build effective and profitable seasonal campaigns which showcase the brands' reputation and simplify the shopping experience.

Massimo comments: “Brands prepare for Christmas, well before the consumer. To get a head start, marketers need to position their brand’s presence well in advance of the shopping season. Brands need a comprehensive omni-channel and personalised strategy to win the hearts of customers. Digital marketing channels add another layer of emotion to campaigns which helps to deepen their customer relationship.”

Massimo continues: “For brands the festive season gives them with the opportunity to better connect with customers. By integrating the insights gathered by consumer shopping behaviour into brands’ marketing strategies, retailers are able to drive customers to convert their activity into sales. Brands are under immense pressure to stand out against their competitors and so capturing shopper’s attention is key to driving significant revenue.”

(1) Contactlab is a digital engagement solution partner combining its owned enabling PaaS technology with industry focused expertise. Contactlab enables brands to plan, build and monitor effective digital contact plans to drive growth. Brands can use Contactlab solutions to build personalized and cross-channel digital messages, shaped around people behaviors and product lifecycle to expand and deepen the retail experience.