The Christmas holiday shopping season is upon us, and for both retailers and consumers, it’s the most wonderful time of the year. Shoppers eagerly anticipate finding the perfect gifts for their loved ones, while retailers prepare for the traditionally busiest and most profitable time of the year.

But how can retailers stand out in a crowded marketplace and make the most of this season? Especially when indicators from GlobalData suggest shoppers facing a 9.3% increase in retail prices. While this rise is expected to drive up spending by 3.4%, this still falls short of last year’s increase and marks a second quarter of slowing growth in 2023.

Nick Gladding, Lead Retail Analyst at GlobalData, comments: “This year’s growth in retail sales is driven by inflation, which GlobalData expects to reach 9.3% for the year as a whole. Sharply higher prices mean shoppers will spend less in real terms than last year, choosing either to trade down or trim the number of presents they buy. Last year’s sales growth was supported by shoppers spending savings built up during the lockdown. But with those savings now depleted by cost-of-living increases and mortgage rate hikes, consumers are likely to shop more cautiously and more savvily.”

 

So, what can retailers do to gain a competitive edge?

The answer lies in highlighting the value and quality of their products. As Gadding puts it “Sharply higher prices mean shoppers will spend less in real terms than last year, choosing either to trade down or trim the number of presents they buy. The dwindling savings, exacerbated by cost-of-living increases and mortgage rate hikes, are likely to shape consumers’ behaviour. As a result, retailers will need to inspire shoppers and emphasise the value they provide to encourage spending.”

We’ll explore the importance of emphasising value and quality to shoppers during the Christmas holiday shopping season, and we’ll provide examples of best practices that can make the difference between a successful holiday season and a disappointing one.

 

Building Trust

One of the most significant advantages of emphasising value and quality during the holiday season is the trust it builds among consumers. Shoppers are more likely to return to retailers they trust, leading to customer loyalty and long-term success.

Retailers can build this trust by ensuring their products are high-quality and providing transparent information about them. Highlight the benefits of the products and use comparison charts to show differences if there are options. Make the information easy to find and use.

When it comes to value, you also need to look outside of just value for money. Does your business or product align with the individual values of your customers? If so, highlight it through storytelling. For some, the cost can be a minor element of the equation, they’re making sure ethical concerns are taken care of first.

On our podcast with Andrew Griffiths from Planet Mark, he spoke about the experience of Unilever in this area.

“Unilever actually did sort of a really fantastic example of this, where they, about five or six years ago, they divided their brands, they’ve got tonnes and tonnes of different companies and brands sit within their portfolio, they divided them into two buckets. One was brands that had a clear purpose-based approach, they had purpose at their core. So, it’s brands like Ben and Jerry’s who had become a B Corp and things like that. Then they had their non-purpose-driven brands. And then they followed them for about five years. And they found that across the board, their purpose-driven brands outperformed the non-purpose-driven brands, in terms of profitability, growth and resilience during things like the pandemic. Purpose-driven, strong ESG-linked brands had had a much greater performance. And that’s what led to Unilever’s decision to adopt a purpose-driven approach across their portfolio and go to all of their non-purpose-driven brands and say, right, you guys should find a purpose because this is good for business.”

 

Best Practice Example: Apple

Apple is known for its unwavering commitment to quality. Their marketing and branding during the holiday season focus on the durability and performance of their products, which resonates with consumers who value reliability and innovation.

By consistently delivering high-quality products, Apple has earned the trust of millions of customers who eagerly await their holiday product releases. And 2023 marked the year that their first carbon-neutral product hit the market. They also made several different changes across their product lines that bring them closer to their commitment of having every product carbon neutral by 2030.

 

Differentiating from the Competition

The holiday season sees an influx of advertisements and promotions from various retailers vying for shoppers’ attention. To stand out in this crowded marketplace, retailers must differentiate themselves by highlighting the unique added value and quality they offer.

This can include special promotions like gifts with purchases or special Christmas bundles unavailable from other retailers or at other times of the year, exclusive products, or exceptional customer service that ventures into areas such as extended return windows, the offer of gift receipts and gift-wrapping services.

It can be common to find ‘gift finders’ across retailers’ websites to help offer inspiration to shoppers but you’ll have no doubt experienced incredibly different offerings. Having one is great, shoppers look for them but having a bad one is likely to send shoppers fleeing.

Offer the ability to break it down by recipient, then apply filters to make cutting out things like alcohol products easy for the consumer. If you’re experiencing high sales volumes, give shoppers the option to hide products that are out of stock. This is especially important the closer to shipping cut-off dates we get. Nobody wants to find the perfect gift only to be told, ‘We don’t have any’.

The biggest trick is making all this easy to find and use. Don’t hide them behind click after click. Attention spans are short, and time is precious. Put yourself in the shoes of the customer and decide if what you’re asking them to read, and use is convenient to the customer experience.

And if you’re wanting to get it right, include them in the conversation and get their feedback. Let them help you create the experience that will best serve them and then follow it up with A/B testing.

 

Best Practice Example: The White Company

The White Company do a great job of exactly what we’ve described. Their header bar highlights extended Christmas Returns before you’ve even started shopping. Their dedicated Christmas section breaks the store into categories and then offers gift finders.

Each gift finder has several filters that can be easily applied to make the results super-focused. Their unique option of fragrance type allows you to focus up on exactly what will work for the person you’re finding a gift for.

Once within the products, key features are highlighted early, delivery and returns information is easy to find and access and gift-wrapping options have a pretty big focus. They even change up the cross-sell by offering products that ‘pair well’ with the one you’re looking at.

The entire experience is seamless, and it would be easy to bundle up a gift and have it packed and sent in not much time.

We compared this to gift finders across several department stores, traditionally renowned for being Christmas Shopping hubs and each one we checked had at least one or two of the expected features missing.

 

Delivering on Expectations

All of the above is great advice but it is nothing without incredible delivery. Quality products and services must meet or exceed customers’ expectations. Retailers that consistently deliver on their promises during the holiday season are more likely to have satisfied customers who come back year after year.

The information offered needs to be accurate, and delivery times need to be realistic. If you’re offering extended returns, they need to be honoured. If you’re telling customers promotions are only available for a limited time or for Christmas, stick with that. If you offer gift wrapping, the examples on the website need to match the reality when it is delivered.

The fastest way to destroy trust and send your customers to your competitors is to not deliver on the expectations that you have set for them. Competition is tight, not only with competitors but for your customer’s Christmas spending. The economy is making choices difficult and now is not the time to let people down with false promises.

When the upswing returns you want these customers to come back, with more to spend because you created a unique experience that was delivered upon.

 

Conclusion

In the hustle and bustle of the Christmas holiday shopping season, retailers must remember the importance of highlighting value and quality. By building trust, differentiating from the competition, and delivering on expectations, retailers can set themselves up for a successful holiday season and cultivate long-term customer loyalty.

In the end, the true gift lies not only in the presents themselves but in the exceptional shopping experiences retailers create for their customers.

If you have questions about how you can get the edge in some of the areas we’ve talked about, reach out to our experts in the Experience Team and they’d be happy to talk about any challenges you might be facing.