Will Rising Consumer Optimism Drive Retail Success in the UK this Holiday Season?

By Lisa Grayston, VP of Commerce Operations, Coveo

UK consumers appear to be in the mood to shop, which should bode well for retailers this holiday season. The British Retail Consortium reported that total retail sales in the UK increased by 0.5% year-on-year in July 2024, which is good news after a dip in June. And recent research from Bazaarvoice claims that UK consumers are more excited about the upcoming Christmas season, and are four times more likely to start shopping before July than US shoppers.

Could recent major events like Taylor Swift’s Eras Tour, which included 15 shows in England, Wales and Scotland over the summer, be one reason for this optimism?  Perhaps. The tour was estimated to boost spending at UK stores, hotels, restaurants, etc. by nearly $1 billion, Barclays estimates.  

Whatever the reason, this optimism was also a key finding in Coveo’s 2024 holiday report, Grinch? Unwrapping This Season’s Shopper Spending Plans. The report is based on a survey that was conducted in the summer of 2024, in partnership with Arlington Research. Its 4,000 respondents were evenly split between the US and UK.

The report findings highlight shopper optimism on both sides of the pond, with 76% of all respondents planning to either maintain or increase their holiday gifting plans – either in terms of number of gifts purchased or the amount spent per gift — even if that requires many of them to cut back on other spending. While indicators were positive in both regions, the UK respondents were a bit more conservative about expanding their gift buying plans – 15% said they plan to buy more gifts, with 55% staying consistent with their previous year’s gift shopping routines. Comparatively, 23% of US shoppers said they will increase the number of their gift purchases with 48% planning to maintain.

A few other notable regional trends and differences emerged as well: 

Black Friday and Cyber Monday still has appeal— While Black Friday and Cyber Monday stem from a connection to a US holiday, Thanksgiving, quite a few shoppers across the UK are adopting the tradition – only 36% of shoppers in said they don’t plan to shop on Black Friday or Cyber Monday (vs. 27% in the US). This leaves 64% of UK consumers who do plan to visit physical or online stores during the Black Friday/Cyber Week timeframe. UK shoppers did, however, indicate that they are much less likely to shop at department stores and big box retailers during the peak, compared to U.S. shoppers (22% vs. 45% respectively).

Print mailings and coupons are not a very popular means of learning about deals, especially in the UK — More than half (51%) of UK respondents said they find out about special offers through a hybrid of digital store ads and in-store signage. Print mailings/coupons stood out as the least selected method for learning about deals for 13% of UK consumers versus 27% of their US counterparts. 

Gen AI-guided gift shopping is an emerging trend to watch in both regions — UK respondents were also somewhat more hesitant about exploring Gen AI for buying holiday gifts online. In fact, 28% of consumers said they would like to use Gen AI for gift shopping, whereas more US respondents (35%) said they’d be open to using a Gen AI-guided gift shopping experience.

Top gifting categories vary across regions– Jewelry, cosmetics and perfume are the top choices for shoppers in both the UK and US; however, substantially more UK respondents prefer this category (42% vs.30%, respectively). Interestingly, the second choice category pointed to different gifting preferences with UK shoppers opting for books (27%), while US shoppers stated a preference for home goods/decor/tools (27%).

It’s worth noting that, overall, the retail trends on both sides of the pond are aligned in many ways. While economic shifts may impact consumer confidence, Coveo’s findings point to an eagerness to partake in the tried-and-true tradition of shopping for the perfect holiday gifts for family and friends.

About the Author: Lisa Grayston is VP Commerce Operations at Coveo, the leading enterprise AI platform that brings AI Search and generative AI to every point–of-experience. A data-centric leader with a strategic growth mindset, Lisa was previously Director of Product Strategy in Research & Development and joined Coveo through the Qubit acquisition in 2021. Alongside Commerce expertise, she brings extensive experience in Supply Chain, Med-Tech, Fin-Tech, Procurement and Mergers & Acquisitions, having previously held roles in companies ranging from Start-ups to Fortune 25.