Only 141 sleeps till Christmas.
Every year, people complain that stores launch their Christmas campaigns earlier and earlier. If they knew how much planning marketing teams put in, some of that frustration might turn into sympathy.
Embracing that knowledge, and despite being amidst soaring summer temperatures, we have dug into consumer spending behaviour in the holiday season last year, from Black Friday to Christmas Day.
Based on this analysis of the performance of thousands of the UK’s biggest brands across retail, grocery & hospitality, we have summarised 10 key takeaways for marketers that can help brands set themselves up for success this upcoming festive period.
1. Black Friday & the festive season is as important as ever.
For the retail landscape, it is worth highlighting the critical importance of the last 2 months of the year.
For many brands, it is make or break, as they battle to secure a share of the £52bn that Britons spend across the nation’s retailers in the festive period. This represented 22% of all retail spend last year which actually represented an increase of +0.5% from 2023 indicating that the period is increasing in importance.
With the average consumer spending £1,021 in retail stores across 33 transactions, there is a massive size of the prize to capture and more purchase occasions to win than ever before.
2. Beware forecasts bearing pessimistic tidings.
As consumers, we’re not always great at predicting our future behaviour – even at the best of times. During the holiday season, however, the flurry of emotions, marketing campaigns, and price promotions puts the gap between what we say and what we do into even sharper focus.
In Q4, our inboxes tend to fill with gloomy forecasts based on consumer surveys – and last year was no different. YouGov, for example, reported a net negative outlook with only 10% of consumers expected to spend more over Black Friday, and just 12% anticipated increasing their spend on Christmas gifts.
Yet once again, retail sales defied expectations. Total sales grew by +16.8%, with the average consumer spending £125 more than in 2023. Crucially, this wasn’t driven by higher prices, but by more frequent purchases as transactions rose by +14.2%. This reflects the power of brands to spark a “just one more thing” mindset.
Despite increasing pressure on household budgets – especially from rising bills – consumers have shown remarkable resilience. As a result, retail spend grew +9.9% year-on-year through to the end of June, driven primarily by a +7.9% rise in transactions.
Looking ahead, the early signs point to an even bigger holiday season in 2025.
3. The perfect opportunity to forge new customer relationships.
The holiday season provides an unparalleled opportunity for brands to expand their customer base as consumers seek discounts or look to treat themselves and their loved ones.
The most successful are those who invest in emotional advertising, impactful in-store displays and seasonal product ranges that can generate the festive-feeling and embed themselves as a cornerstone of the seasonal calendar.
For example, we found that 47% of John Lewis’s and 64% of Selfridges’ holiday shoppers had not made a purchase in the previous six months – highlighting the power of the season to attract lapsed or entirely new customers. While less dramatic, 12% of Marks & Spencer’s holiday shoppers were new to the brand during this period – an impressive increase in reach compared to their grocery sector peers.
There is particularly a great opportunity for brands that are heavily dependent on stockists to promote their DTC channels. Consumers increasingly buy direct from brands to find the best deals or dream items and within Athleisure we find that for the likes of Nike, Lululemon, Adidas, and Sweaty Betty in excess of two thirds of their client base in the holidays are new customers.
It provides an unparalleled opportunity for brands to forge direct relationships with their customers enabling them to grow their future direct marketing reach and a more effective tailoring of content.
4. But existing customers provide a more lucrative opportunity.
Whilst new customers are an exciting prospect, brands need to make sure they balance this focus with the needs of their existing customers who will be critical for driving shorter term ROI.
Our analysis has found that regardless of the size of a brand, their existing customers are considerably more valuable, spending on average +56% more than new customers. This is particularly true for more premium retailers such as John Lewis (+79%) and Selfridges (+76%), and the Supermarkets where returning customers spend more than double.
The only exception we have observed to this rule is for brands with a low customer frequency and high average transaction value such as within the Electronics & Technology category. In the case of Very (-10%) and Currys PC World (-69%) we found that returning customers actually spent less than new customers reflecting the lower incremental value of a repeat purchase in the short-term.
Brands need to focus on keeping their existing customers engaged through their direct marketing channels. The key is to have a clear understanding of your shopper profiles, their interests, tastes and preferences, and to leverage these insights to get the most out of your CRM.
5. Spending peaks around Black Friday & Cyber Monday.
The spending frenzy of the holiday season hits its peak within retail during the weeks of Black Friday and Cyber Monday where £7bn and £7.2bn was spent in 2024 respectively. These represent retail’s 2 biggest weeks of the calendar year and means there is a significant size of the prize for brands to go after with the average consumer spending over £160 each week.
Whilst there is fierce competition this is also a period when shopper promiscuity hits its peak with this spend spread across 5 transactions and with 3.4 different retailers on average. This broader repertoire indicates that consumers are more willing to consider other brands, and combined with more purchase occasions, it provides more opportunities to break into shopper baskets.
While shoppers are hunting for the best value deals, they’re also willing to spend, with average spend per transaction surging by +16% as attention shifts to premium brands and big-ticket items. As expected, Electricals & Technology retailers saw their peak share of basket during this period, bringing in over £500 million per week. Consumers also traded up to premium beauty brands during the sales. Clothing retailers had a standout performance too, with over £1 billion spent per week – driven particularly by strong demand for womenswear, footwear, and athleisure.
Wrapping up Part 1.
As we’ve seen, retail spending gets off to a fast start in the holiday season thanks to Black Friday and Cyber Monday, and this offers an unmatched opportunity for brands to connect with new audiences, re-engage loyal shoppers, and capitalise on the consumer appetite for indulging. But the festive story doesn’t end there.
In Part Two, we’ll unwrap five more lessons that dive into the themes of last-minute buying behaviour, the drive for connection, and how age plays a role in shaping the holiday season.
