How we sHop reportCharting our Changing

shopping behaviours

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Contents

Foreword

Introduction

What shoppers really want this Christmas

Shopping tribes & the ‘Christmas Effect’

Personal spending shopping forecast

The changing pace of ‘Last-Minute’

Conclusion

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Foreword H av e yourselF a merry lit tle CHristm as

This happy little phrase once conjured up images of trawling the high street, last minute panics and incessant queuing before we could sit down with our loved ones to turkey and all the trimmings.

But the face of Christmas shopping has changed. Savvy shoppers now blend trips to the high street around planned online sessions through their mobiles and other devices. Never have we been so engaged and informed about shopping. And the UK is leading the world in embracing this new approach to consumerism.

The research presented within this report shows how different our shopping habits are in 2014 compared to just a few short years ago and introduces a set of shopper typologies that reflect these changes. These will be invaluable to any store keen to improve the experience of their customers and increase sales.

As Director of The Retail Institute, at Leeds Beckett University, I have followed this retail revolution over the last decade and seen how the digital world and the high street are continuing to merge and complement each other. This new digital world is the future and the UK loves it!

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Cathy Barnes

Professor of Retail Innovation,

Leeds Beckett University

introductionChristmas 2014: the Ye ar shopping Changed for good?

Christmas shopping has never been so high up the news agenda. It’s a front page, top of the hour story. But why is the way we shop garnering so much attention right now?

But also shopping that fuses the best of technology and the good old fashioned human touch so we can have our (Christmas) cake and eat it.

It’s no secret that the UK has long been Europe’s number one e-commerce market, comfortably outstripping that of larger economies such as France and Germany. According to Mintel, 2015 will see another 14.5% leap in online retail spend in the UK, comprising almost 13% of all retail sales.

But the difference now is that ever smarter technology (from the devices we use through to retailer stock and delivery solutions) is allowing for ever smarter shopping. More consumers than ever before are becoming adept at using these innovations to improve the way they shop and take greater control of their shopping experiences. This Christmas, more than any before, we are seeing a huge shift and a new kind of shopping is emerging;

Put simply, it’s because there’s something of a revolution going on. Consumer behaviour is changing and changing fast – challenging retailers to stay ahead of the curve and this Christmas promises to be a watershed moment for the great British art of shopping and the retail industry itself.

• Shopping where finely tuned detective-work begins on the morning commute, in the bath or during the ad break

• Shopping where last-minute doesn’t mean an increased heart-rate, sweating brow or panic-buying terrible gifts!

• Shopping where opening hours, the time of day or day of the week are increasingly being rendered obsolete

The research indicates that Christmas 2014 is the year where 2.8m shoppers will be calmly, calculatedly researching and reserving the gifts they want from their smart devices on the bus or train into town, before quickly collecting them from store and still soaking up the buzz of the carol singers, Christmas music, high street decorations or mulled wine with friends at the German market. That’s smart Christmas shopping and it’s a viable reality.

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It unearths some intriguing new ‘shopping tribes’ defined by their exacting needs, techniques and preferences but at the same time provides compelling evidence that the majority of us are now routinely using new technology, smart strategies and tactical insight to secure what we want, when we want and how we want it.

This report surveyed 2,057 UK shoppers across all generations from 60s baby boomers to millennials, and from urbanites to rural dwellers. It explores the shopping traits and characteristics of British shoppers across the year and especially when shopping matters most to consumers and retailers alike - at Christmas.

The benefits of online shopping are clear to see for the reality of many hard working Brits – just six out of ten people working 50 hours a week or more will be visiting the high street this Christmas but three quarters will be Christmas shopping on their computer/laptop – it simply fits better into their hectic schedules.

For all the fanfare for online shopping - fifteen years old this year - and the huge benefits it can bring, centuries of tradition will not be swept aside just like that. Only one in ten Brits will do all their Christmas shopping online this year, therefore 90% are using a mix of other channels.

Retailers are recognising the future needs to fuse the best of both worlds to give shoppers what they want.

Men are more likely than women to surf for Santa’s gifts online rather than battle the crowds - 72% of men will use a computer/Laptop. 64% of men will hit the high street compared to 72% of women.

The consumer research highlights what Christmas 2014 looks like in terms of anticipated spend (including how and where we’ll spend it), festive preparation levels and an exploration of what last minute shopping might look and feel like this year. Above all though, despite our shift online, the report resolutely shows there is an appetite for convenient digital options combined with, but not replacing, the high street experience.

1 in 10 will be shopping on their phone for Christmas, though this figure leaps to nearly three out of ten 16-24yr olds.

Devices used for 2014 Christmas Shopping

what shoppers really want this Christmas

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While some of the Christmas shopping rules have shifted irrevocably, some rules still stand. Indeed, value for money is King this Christmas. When we asked shoppers what attributes they are looking for from retailers, a Top 10 ‘Christmas Shopping Charter’ was revealed;

- but crucially online is now informing decisions about where to head in store.

Speed of service is critical at Christmas, as are flexible delivery options as shoppers take control of when and where ‘pick up’ or delivery happens. One in ten shoppers are now looking for Click and Collect, or Check and Reserve, solutions to fit their needs.

The ability to compare prices at the swipe of a touchscreen or a quick Google search means that finding and getting value for money has been ‘democratised’ – we can now all see where the best deals and bargains can be had without putting in the legwork. Little wonder then in post-recession Britain that value for money rules the roost when shoppers are prioritising their Christmas shopping choices and destinations.

Other key criteria includes breadth of product range - where historically online has often trumped in store

The Christmas Shopping Charter

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In fact 59% of all shoppers do adapt and ‘morph’ their retail behaviour at Christmas in order to ‘compete’.

A further 10% say they are more likely to use specially tailored delivery solutions, like Click and Collect in order to get their Christmas list pinned down.

For most then, it is about balance between the two.The biggest change though is the shift towards technology and online platforms - some 17% of all shoppers say they actively switch their priority to online at Christmas when, for the rest of the year, they tend to do their shopping in-store.But crucially the research shows that a behavioural

shift happens amongst more than half of shoppers as Christmas approaches. The pressure to get the right gifts, the significant investments being made and the need to meet tight deadlines can turn the most traditional shoppers into digital converts.

The research revealed that shoppers can increasingly be grouped into different categories based on their online and offline behaviour, their buying priorities and their differing approaches to the art of shopping

shopping tribes and the ‘Christmas effect’

The shopping tribes identified within the research include;

Secret Shoppers

Accounting for just over a third of all shopping types, Secret Shoppers are typif ied by their preference to shop alone, rather than with partners or in groups. They tend not to ask for or give opinions on their purchases. They are the group least likely to be inf luenced by social media reviews. Secret Shoppers will spend on average £319 on gif ts this Christmas and they have completed 46% of their Christmas shopping so far.

Shopping Einsteins

A much smaller tr ibe of shoppers, representing just 8% of all shoppers, Einsteins are quite comfortable combining commuting with shopping and often wait for ‘ f lash sales’ before they swoop and are the group most likely to use tablets or even Smart T V for shopping. A f if th of them tend to research online but choose to buy in-store, higher than other shopping tr ibes. Shopping Einsteins are also most likely to shop from the bed, the bath and beyond and four out of ten will research retail social channels before making a purchase. They’ve done 51% of the Christmas shop so far and will spend – on average - £406 on gif ts.

• 31% of all shoppers say they will be shopping ‘mostly online’ this Christmas

• 30% say there will be an even split between online and in store

• Just 18% say they will be shopping ‘mostly in-store’

• 11% say they will only be shopping in-store • 9% say they will only be shopping online

Eye-catching groups include the rise of ‘Digital Magpies’ and ‘Shopping Einsteins’ who are leading the pack in identifying and spotting bargains and using digital tools to snare them first, gaining competitive advantage and turning shopping into something of an art-form.

Digital Magpies

Priding themselves on securing the best deals and securing the very latest gadgets and technology, unsurprisingly Digital Magpies are the group most likely to be using hi-tech smart phones to do their Christmas shopping. They are twice as likely to shop whilst at work compared to the average shopper but are a relatively small tr ibe – representing just 7.7% of the shopping population. Highly inf luenced by online forums and reviews they are keen followers of social media and they also spend big, expecting to spend £455 on gif ts this year.

Radar Shoppers

So-called because much of their shopping is unplanned until it ’s on their radar, this group, accounting for 7% of all shoppers, adopt an ad-hoc and impulsive approach to shopping. Highly inf luenced by what they see on T V, radar shoppers have done 48% of their Christmas gif t shopping so far and, perhaps by vir tue of their lack of planning, are the highest spenders, expecting to spend £457 each on gif ts.

Cruisers

The shopping tr ibe with the most t ime on their hands, representing 10.5% of shoppers - Cruisers enjoy the social element of hit t ing the stores and relish taking their t ime over decisions. They are twice as likely, compared to other groups, to do their research and buying all in-store and are also more likely to be found at multi-store out of town retail parks this Christmas. For them, even last minute will tend to be wholly in-store and they have only done 42% of their Christmas shop. On average, Cruisers will be spending £371 each this Christmas.

Peacocks

The smallest shopping tr ibe, accounting for one in 40 shoppers, Peacocks pride themselves in shopping with brands that treat them well. They have a tendency to tell as many people as possible about their purchases and retail experiences and are the group most likely to be inf luenced by the opinions of fr iends and family. Almost nine out of ten Peacocks will be hit t ing the high street this Christmas – more than any other group. But for all this they will be spending the least on gif ts (£308 each on average) and have only done 46% of their Christmas shop so far.

Advos

Almost one in f ive of all shoppers, Advos strike the most equal balance between online and off line and become very loyal to their preferred retailers. They are the biggest advocates of click and collect – some 16% tend to shop in this way – and have already completed 51% of their Christmas gif t shop. Advos will be spending more than average this Christmas, with total gif t buying forecast at £404 each on average.

ReTrads

This group, who display a preference for one-on-one interaction with shop assistants in-store tend to only shop online for convenience. They are much more inf luenced by knowledgeable staff in-store than other groups and tend not to follow social media. They are also well prepared for Christmas as the group least likely to need to do ‘last-minute’ this year. Whilst displaying some tradit ionalist views and behaviour they are still very comfortable shopping online. ReTrads represent one in ten of all shoppers and will be spending less than most shopping groups this year with an anticipated spend of £309 each.

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Thanks to mobile technology, it’s no longer even confined to the sofa, the dining room table or the office desk – 16% of us now shop from our beds (7.35m ‘duvet shoppers’), 980,000 shop on the loo and 686,000 use bath-time for shopping. Another half a million shop on the way to and from work, taking multi-tasking to new levels.

The research offers, a fresh glimpse into how often we shop online. This helps to demonstrate just how far it has become a natural extension of our social and leisure time.

Outside of weekend periods, the peak week day for online shopping tends to be Wednesdays and outside of typically busy evening periods (especially 7pm-9pm) online shopping tends to peak around 11pm-12pm and between 2pm-3pm, in the run up to, or shortly after lunchtime. The reality is, any time is now shopping time, and with a shift towards mobile shopping the boundaries are becoming increasingly blurred.

Amongst online shoppers, 54% tend to research and buy online, while 13% tend to do the research online but still buy in a store. However, 12% tend to research and reserve online and collect from a store.

But online shopping is now as much a part of our weekly routine for 40% of the nation – 4/10 shop online using a computer/laptop at least weekly, 15% shop via tablet at least weekly and one in ten use their mobile for shopping at least once a week.Meanwhile one in thirty (3%) now shop using their Smart TV at least once a week.

Outside of the Christmas period, on average 51.5% of us will shop on the high street at least once a week and 22% will shop at an out of town/retail park location at least weekly.

National Shopping Audit: Shopper Behaviour Revealed

The East of England (£307), South West (£312) and Yorkshire (£329) expect to spend the least this Christmas and amongst key British cities Newcastle will be spending the most (£481) and Norwich the least (£262).

The most generous shoppers can be found in the North East where spend is expected to top £469 on average – while other high-spending regions include Wales (£434), Scotland (£415) and the North West (£413).

The average shopper expects to spend £365.60 each on gifts this Christmas, suggesting some *£17.9 billion will be spent across the nation.

personal Christmas spending Forecasts

£307

£329

£469

£413

£415

£312

£434

£364

£365

£328

But amongst the younger generation some 14% of 16-24 year olds will be adopting this tactic this Christmas as part of their last-minute strategy, so they can balance socialising commitments with getting the gifts sorted.

Regionally, Welsh shoppers are leading the Christmas buying race this year, with 57% of the gift-buying complete, compared to just 42% for Londoners, who are currently least prepared. Across Britain’s biggest cities Cardiff and Nottingham shoppers are pulling away from the field with 56% and 54% of their gift buying completed compared to just 41% in Nottingham and 42% in Glasgow.

Female shoppers are, perhaps unsurprisingly, slightly ahead of men, bagging 50% of the gift buying compared to 44% for men with only days left to shop.

But even though 71% of shoppers say they will be doing ‘last minute’ Christmas shopping, this year shoppers are increasingly armed with smart devices and smart options such as Click and Collect/Check and Reserve to bag the bargains.

At the start of December, shoppers had, on average, completed 48% of their gift-buying. In the past, this may have set alarm-bells ringing. Cue last-minute panic buying.

the changing pace of ‘last-minute’

One in five last minute shoppers say they will be doing it all online while 6% (some 2.8m shoppers) will be using ‘stealth tactics’ to bag last minute bargains, such as Click and Collect/Check and Reserve, to research items on their smart phones on the way into town and collecting them when they arrive!

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Conclusion

Over the last few years, we have seen the UK become the number one market for online retail, accounting for 14% of all sales. British shoppers have clearly learnt how to shop smarter using technology. In fact 70% of us will be using our devices to purchase gifts this Christmas.

The digital revolution in retail is making it easier and more convenient for us to buy gifts for our loved ones and acts as an enabler to the overall retail experience. Merging digital shopping with the high street through services such such as Argos’ ‘Check and Reserve’ means that the 2.8 million last minute shoppers in the UK are still able to get those perfect presents right up to closing time on Christmas Eve.

2014 will be the year when digital retail came of age and last minute shopping did not mean second best.

Cathy Barnes

Professor of Retail Innovation,

Leeds Beckett University

Research conducted by Opinion Matters, commissioned by Argos, was carried out between: 27 / 11 / 2014 and 05 / 12 / 2014. Sample: 2,057 UK adults who buy Christmas presents.

*£17.9bn figure is based on a calculation derived from UK adult average gift expenditure multiplied by UK adult population (2011 Census)