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Latest Issue: Nov/Dec 2018

76 per cent of shoppers turn to luxury brands for Christmas gifts

New research by Bazaarvoice has revealed 76 per cent of UK shoppers who usually shop at mid-market brands such as Next and Debenhams are likely to switch to luxury brands including Selfridges, Burberry, Mulberry and Omega at Christmas. Ahead of the all-important winter sales period, Bazaarvoice commissioned investigative research with 4,000 consumers from the UK, France and Germany to explore how shoppers are going to behave by discount, mid-market and luxury preference. The migration from the mid-market is tied to the eruption in budget brands and discount days, with 69 per cent of UK respondents stating they will now shop at Argos, TK Maxx, H&M and Tiger.Highlighting this, 61 per cent of consumers who are now looking to buy Christmas gifts from brands like Burberry and Omega are looking to buy them at a discount on Black Friday. They are also the most likely to buy gifts on Boxing Day (46 per cent) when the sales start.

While this certainly seems to reaffirm recent headlines spelling doom for the mid-market, ‘The Edges of Experience’report also finds a huge opportunity in the run-up to Christmas.

‘Value’ doesn’t mean low quality

Chief among the challenges facing the mid-market is the fact consumers are more focused on value than ever before. Not only are they now choosing discount brands because of price but a quarter of shoppers associate their budget brands with quality products.Furthermore, in the online realm, Amazon continues to claim a monopoly because when it comes to consumer perceptions of where the best product deals are over the winter sales period, 60 per cent of all shoppers place it top.

As Amazon continues to grow its stake of the Christmas shopping frenzy with UK, French and German consumers estimate they will conduct 43 per cent of their shopping on the platform this year – a 4.3 per cent increase from what they spent on Amazon for Christmas in 2017.

How can the mid-market defend itself?

However, in the run-up to Christmas respondents said the contributing factors to not choosing global marketplaces such as Amazon are the delays in delivery (42 per cent) and articles selling out (28 per cent). This has been caused by so many shoppers flooding the site and completing purchases simultaneously.In fact, UK shoppers are actually more likely than their US counterparts to head in-store for the sights, sounds and ambience of a Christmas shopping experience. 54 per cent of shoppers value the gift ideas they get while visiting. Interestingly, nearly three fifths of consumers across Europe are planning gifts they don’t believe Amazon can help them with.

Joe Rohrlich, EVP and GM EMEA at Bazaarvoice comments, “Effective product sampling is one of the best ways retailers and brands can get to grips with what will successfully inspire shoppers browsing the aisles. Sampling not only provides significant opportunity for brands to get their products into shoppers’ hands, but also to collect feedback and content to use as advocacy ahead of a wider product launch.”

Competing on quality, not price

While discount shoppers remain steadfast in their choice of the best prices, the UK, French and German mid-market shoppers still centre their buying decisions on the quality of products (60 per cent). “Budgets brands have worked hard to serve this pursuit of quality, but true mid-market brands can leverage their reputation and loyal customer base to redress shopper confidence”, concludes Rohrlich. “Ratings and reviews help customers make informed purchase decisions, they also assist in product discoverability and give brands and retailers valuable product insights.”

Importantly, the mid-market should never look to compete through price. While over two thirds of the luxury market express positive sentiment towards brands that offer discounts around days like Black Friday, this drops to just 54 per cent among mid-market shoppers who are among the most likely to react negatively and not buy from the brand again.