Vaccine breakthrough boosts consumer confidence ahead of key shopping period
With Black Friday around the corner, more than a third (36%) of UK shoppers are planning to use the annual sales event to pick up a Christmas bargain, according to research out today by KPMG.
The study polled 2,000 consumers about their spending intentions for the Black Friday promotion period. It found one in seven Brits are planning to spend more during the Black Friday sales period than they did last year, with demand driven by 18-34-year olds. Over half (56%) of consumers surveyed in this age group said they plan to buy a gift during this time and 28% intend to spend more this year than last on Black Friday bargains.
Technology, clothes and toys topped the list of most sought-after Black Friday bargains for consumers, and with non-essential high street stores closed across much of the UK during Black Friday, nearly two-thirds (61%) of consumers will be shopping online for their bargains – up 11% on last year.
The survey also showed that news of an impending COVID-19 vaccine has had a positive impact on consumer sentiment. Nearly a third (29%) of respondents said they are more likely to feel confident in their long-term financial situation as a result of the news and 21% said they are now likely to spend more this Christmas.
Commenting on the findings, Linda Ellett, UK head of consumer markets at KPMG, said:
“After a tough year for retailers it’s encouraging to see that consumers are planning to engage with this key event in the calendar, though retailers will have an eye on their margins with many consumers choosing to hold off their purchases until the serious discounting begins.
“News of a COVID-19 vaccine that could be rolled out as early as next month is a light at the end of the tunnel for struggling retail and hospitality businesses. A vaccine breakthrough signals the potential for eventually lifting social distancing restrictions, which would bring a much-needed boost to footfall in the High Street.
“2020 has seen the shift to online shopping accelerate significantly, so it is little surprise that the trend from last year continues, with large numbers of people searching for deals from home and with younger tech-savvy consumers even more motivated to grab a bargain. For many consumers, shopping online has now become a choice and a habit. The winners in the battle for the Christmas pound will be those retailers that have invested heavily in their digital capabilities to take advantage of this step up in online activity.”
Whilst many shoppers are choosing to use Black Friday to purchase bargain Christmas gifts for loved ones, they are considering their purchases much more carefully this year. Just 10% of shoppers say they will make impulse purchases during Black Friday this year, down from 21% in 2019. Over a quarter of shoppers (26%) said they would not buy for the sake of it, with 13% of consumers claiming to only buy Black Friday bargains from brands and companies that have good ethical and environmental practices.
Linda Ellett, UK head of consumer markets at KPMG, observed:
“The trend of consumers paying closer attention to where they spend their money continues. The growing campaign around sustainable shopping has clearly prompted more strategic and planned purchases – whether that entails looking more closely at the product and the retailer’s environmental credentials, or fundamentally asking whether the product or service is a must-have. Combined with less High Street browsing due to lockdown, there is less impulse shopping taking place and retailers will have to work harder to get people to part with their money this Christmas for all those extra treats.
“In a year where family, friends and community have become central to our wellbeing, but we can’t go to see them, consumers are planning to send gifts to show their love and gratitude, and this could have an impact on New Year sales and retail margins as we head into 2021.”
Warning for last minute bargain hunters
For many Christmas bargain hunters, Black Friday has not come early enough. Four in ten (41%) of shoppers surveyed claim to have shopped early, in order to secure the gifts they really want, or to spread the cost over several months.
Nearly a third (30%) are choosing to take a more laid-back approach saying they will leave their Christmas shopping until nearer to the big day, with 5% intending to grab last minute bargains in the days beforehand.
Commenting on the significance of the next few weeks for retailers, Don Williams, Retail Partner at KPMG concluded :
“Alarm bells will be ringing for retailers at the number of consumers choosing to shop late for Christmas this year. There is only so much capacity available both in-store and with delivery vans on the road. We are already seeing retailers warning shoppers to avoid disappointment by not leaving gift buying too late. Retailers need to be clear in their communication on what is and is not possible. Any failure to keep online shoppers happy by meeting their expectations could see them lose hard won new customers in what is a very competitive environment.”
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KPMG UK commissioned research agency Opinium to poll 2,006 UK adults aged 18+ on questions relating to Black Friday and Cyber Monday. Results have been weighted to be nationally representative. The questions were in field between Friday 13th – Monday 16th November 2020
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