Danny Rogers looks at festive buying habits and asks if marketers are
meeting the Christmas challenge
Customers are spending, retailers are smiling. But are marketers
‘Christmas started late this year, possibly because of the November
budget, but now we’re in full swing,’ enthuses Ron Woodman, marketing
manager at Newcastle’s thriving Metro Centre.
He says footfall for the centre is up 3% on last year and spend 15%
higher. ‘We’re also getting a record number of Norwegians, who love
British sausages and appear to know the Argos catalogue back to front.
There’s also an unconfirmed report of a Norwegian buying an artificial
Christmas tree,’ he laughs.
And according to new research by Deloitte & Touche Consulting Group’s
consumer business division, this increase in consumer confidence is not
confined to the North-East.
Its survey of retailers and consumers reveals that 84% of retailers
expect an increase in Christmas sales on last year. Although only 19% of
consumers say they expect to spend more, the average increase in
turnover is expected to be around 7%.
‘People tend not to remember how much they spent last year. They do seem
to be spending a little more this year, although we’re not yet sure of
the strength of the foundations underpinning this recovery,’ says
Patrick Naegeli, senior manager at Deloitte & Touche.
From a marketing point of view, it is critical to take a look at what
people are actually buying and why, where they’re shopping and the
influences on their purchasing decisions.
Although it is too early to properly evaluate this year’s purchasing
patterns, Woodman says high-quality luxury gifts, personal computers and
electronic games are all selling well at the Metro Centre.
Rupert Hodges, communications director at the British Retail Consortium
(BRC), says: ‘Traditional presents, such as Action Man and Barbie, are
doing well. New performers are the Toy Story video and the Manchester
United calendar. We are also seeing success in practical, non-essential
items, such as Black & Decker tools and widescreen TVs.’
So are we seeing a return to the boom times of the late 1980s? Maureen
Johnson, managing director of Research International’s retail division,
believes that instead there has been a shift in behaviour. ‘Although the
recession is over, people aren’t throwing their money around. Consumers
have become ‘hunters’,’ she says.
Johnson explains: ‘Our focus groups have shown that consumers have
become sensitised to value for money. They’re shopping earlier and are
highly responsive to special offers.’
She gives the example of the success that Debenhams, Boots and WH Smith
have enjoyed with special discount days and offers on selected gift
The BRC’s Hodges agrees that there is still a lot of retail price
competition and people realise they can get a good deal on the high
street. ‘Earlier in the autumn there was talk of the threats of
inflation, but there was still no sign in the November sales figures. On
the contrary, it is possible to buy many products cheaper than last
year,’ he says.
Although pricing is high in consumers’ priorities, Deloitte & Touche’s
figures reveal that location is an even more important factor.
The retailers it surveyed expect to see out-of-town stores gain a share
of consumer spending at the expense of high-street and traditional
Indeed, giant shopping centres, such as Lakeside in Thurrock and
Meadowhall in Sheffield, are further extending their hours over
Christmas. They are now open until nine or ten at night, while the
Sunday Christmas shopping outing seems to have become a new form of
national entertainment, with queues regularly extending miles into the
Last year, research company RSL’s retail business unit looked closely at
where people did their festive shopping.
‘We discovered that most people are still shopping in the high street
and even those going out of town would have preferred to do so, but
were driven by convenience,’ says divisional director Rowena Patterson.
‘I wouldn’t expect a great shift towards out-of-town centres this year.
There are few new retail developments and people know what the existing
Patterson believes that because of the continuing price wars, retailers
can’t differentiate on price alone. Location is key and retailers are
also becoming more and more sophisticated in marketing themselves.
As Maurice Saatchi revealed earlier this year, retailers are now among
the top TV advertisers.
The shopping centres themselves are also beginning to join the major
league. Both Newcastle’s Metro Centre and London’s Brent Cross have
recently used TV advertising. The Metro’s Woodman says the Christmas
decorations TV project alone cost pounds 200,000.
Apart from overall pricing and location, there are also more subtle
influences on people’s buying patterns in the festive season. Wendy
Gordon, chairman of The Research Business and an expert in point-of-
purchase issues, has looked extensively at what makes people buy gifts.
‘Despite what they say rationally, people’s behaviour at the point of
purchase is quite different,’ says Gordon. ‘In a focus group, people’s
views are influenced by what is politically correct or socially
acceptable. However, when one actually accompanies people while
shopping, it’s a completely different story.’
Gordon says consumers are far more impulsive and often not conscious of
their behaviour. Key influences are colour, different merchandising
formats, novel ideas, or they may simply be influenced by their mood at
‘Particularly when people are buying treats or presents, they’re
affected by their whole environment. In this sense manufacturers may be
myopic, marketing with their direct competitors in mind rather than
reflecting the mindset of the present-seeking individual,’ she says.
Gordon describes the Christmas shopping environment as ‘chaotic’.
‘In a busy store the consumer may make decisions less mindfully than
usual. By organising their store well, retailers may make life easier,
but advertising becomes particularly important because it can act as a
beacon for products,’ she says.
Deloitte & Touche’s research confirms the comparative effectiveness of
TV advertising during the Christmas period.
Thirteen per cent of consumers questioned claimed it has a strong
influence on their purchasing decisions, and 25% said that it has some
influence. Other advertising media, such as press and radio, have far
It also reveals that the biggest single influence on purchasing
behaviour is a specific request from the gift’s recipient, with 55%
saying this has either ‘strong’ or ‘some’ influence. A classic example
is the request from a child who spots a toy on TV and begins to
‘pressurise’ mum and dad.
But how well are manufacturers and their advertisers exploiting such
New research commissioned by Initiative Media examines the way people
approach festive-gift buying, in order to advise clients on how to phase
The research shows that children’s presents are bought or chosen much
earlier than those for adults. By early November, 45% of parents had
decided what to buy their children. Yet by the same point in time, 43%
of adults were still thinking what to buy for their partners and 27% had
not even started to think about it.
‘Many people assume they will give items like wines and spirits,
chocolates and perfumes, but these would appear to be ‘last minute’
purchases,’ says research director Philip Walker.
Initiative Media discovered that advertising for this category tends to
build to a peak in December. Support for toys, games and records, on the
other hand, is well under way by October, with relatively modest support
Walker poses the question: ‘Is advertising following behaviour in the
more ‘adult’ categories, or could advertisers learn a thing or two from
the toy and record industries, by starting their campaigns earlier to
try to influence the pattern of purchasing?’
Deloitte & Touche’s Naegeli believes there may have been a shift in
gift-buying behaviour: ‘With an ever-more bewildering choice of gifts
and fast-moving fashions, we’re probably changing the way we buy
presents, with more emphasis on requests by the recipient.
‘TV advertising has always been the strongest influence on Christmas
purchasing, but it can have both a direct and indirect effect on a
So how does one stand out in this festive marketing frenzy? ‘People are
cynical about advertising, yet still want Christmas to be exciting and
indulgent,’ says Research International’s Johnson. ‘Our research shows
that people don’t want to be patronised. The best advertising is that
which talks indulgence, but cleverly, recognising that people want
economy and to save time in their busy lives.’
Share of advertising expenditure (1995)
August,% September,% October,% November,% December,%
Toys & games 4.8 10.1 19.6 28.1 12.8
Perfume 1.9 6.5 10.3 21.1 32.4
Chocolates 0.5 4.6 10.6 21.4 38.4
Alcohol 9.3 7.2 6.4 12.0 22.7
Records/CDs 7.1 6.6 9.8 21.4 13.4