New research from Capgemini shows that 40% of those aged 18-34 will be spending more on festive shopping in 2019 than last year. This is in comparison to an overall average of 28% for all age groups.

While quality, cost and convenience continue to drive the majority of purchasing decisions, retailers are under increasing pressure to adopt new strategies to appeal to younger shoppers.

The research found that key strategies to attract younger shoppers include channel diversification across online, in-store and voice; investment in making products and packaging more environmentally friendly; and using technology to improve the shopping and delivery experience.

The online survey explores the spending plans, shopping priorities and expectations of over 6,700 consumers across the UK, France, Germany, Spain and the US ahead of this year’s festive shopping season, which kicks off with Black Friday on 29 November 2019.

Environmental sustainability is an increased priority, but getting the basics right is still key

Consumers still consider the variety/range of stock available (34%) and convenience of a store’s location (21%) as the primary factors for choosing to shop with one retailer over another if price is not a factor.

Similarly, when asked to choose the top three factors that influence them when shopping for gifts for family and friends, respondents prioritized the quality of products and cost-saving options. The variety of products offered was the third most popular factor.

When asked about where they would most like to see retailers invest this season, maintaining or reducing current price levels of items (33%) was the top response. However, perhaps reflecting greater awareness of sustainability issues this year, selecting products and packaging that are environmentally friendly was a key consideration for 21% of all respondents; slightly more so for those aged 18-24 (24%).

Across all countries, respondents in the UK were the most focused on sustainable packaging (29%). Following the UK is Germany (21%) and France (19%), and then the US and Spain (14% each).

Diverging generational expectations

Those aged 18–34 showed several key differences in their shopping priorities in comparison to shoppers age 35 and above.

The 18–34 demographic were less likely to use physical stores for their 2019 festive shopping. Instead, they opt for retailers who offer access to multiple brands. Furthermore, 29% said they’d spend the most money in-store while 37% said they’d spend most money through a retailer with access to multiple brands. This compares to 39% and 32% respectively for the all-age group average.

Additionally, those aged 18–34 are more likely to use new technologies to improve their shopping experience. They had a higher preference for technologies such as automated checkouts (23% vs 16% on average); mobile wallet payments (21% vs 12% on average); in-store technologies (22% vs 15% on average); and new methods of delivery – i.e. drones or in-car delivery (16% compared to 10% on average).

Importance of channel diversification

Physical stores are still set to receive the bulk of festive spending; 39% of consumers are planning to make most of their purchases in-store during the season. Online multi-brand retailers are also set to receive sizable shares of festive budgets this year. In fact, 32% plan to spend most of their money on these sites.

For retailers looking to capitalise on the opportunities of voice-based shopping, consumers would be more likely to use these platforms if they felt the experience would be secure (25%); if they were offered unique voice discounts (23%); and if they were confident it would be a straight-forward experience (20%). This is particularly key for retailers targeting younger shoppers (18-24-year olds), where the percentages rose to 29%, 33% and 27% respectively.

Delivery and convenience expectations

Not surprisingly, the month before Christmas is the peak shopping time for consumers; 30% of shoppers typically starting their shopping from that point. While some online retailers continue to offer faster delivery options such as overnight and same-day, consumers generally expect delivery/collection within three working days to be the norm (33%).

More broadly, technology-driven convenience will be key to improving the shopping experience. However, regional variances mean that retailers must adapt to local market demand. This includes shops using innovative technology in-store in Spain (31%) and France (18%); the ability to use mobile wallet payment for US consumers (17%); and self-service checkouts in the UK (15%).

Commenting is Andy Mulcahy, strategy and insight director at IMRG. “In reality, same-day delivery is only a realistic option for a handful of retailers with the distribution infrastructure to support it. Many can offer next-day as a fast option though and, as Christmas gets closer, its appeal is easy to understand.

“We do see retailers restricting it when volumes get too high to maintain the promise, however – on 1 November 2018, 220 of 260 retailers tracked had some kind of next-day offer; by the morning of Black Friday, this number dropped to 160 and by the afternoon it fell further to 139. So fast delivery is a useful option to offer, but only if the promise made to the customer can be met.”