Coping with Christmas – will the cost of living crisis change customer behaviour in 2022?

The cost of living crisis could put a damper on festive spending. But it’s not too late to turn things around…

Article by Martyn Jones | 19th December 2022

Christmas is supposed to be the high point of the retail calendar. A chance for stores to boost their sales and end the year on a high. But, as we’re sure you know, things haven’t exactly gone to plan in recent years.

Last minute lockdowns may be a thing of the past, but the cost of living crisis is looming large over this year’s festivities. It remains to be seen how this will affect customer behaviour, but it’s safe to assume that many shoppers will be tightening their belts as we head into December. 

This is probably the last thing you want to hear, but there’s no reason to despair. By focusing on customer needs and cutting unnecessary costs, you can still have a successful Christmas. Here’s how we can help.

 

“More gloom than glitter”

With energy bills soaring and the cost of basic food items rising by as much as 17%, it’s no surprise that many Brits are planning to cut back this Christmas. 

  • 60% of shoppers plan to spend less than usual on gifts 
  • Over half are planning to buy discounted or second hand gifts, while 8% are not buying gifts at all
  • 41% fear that they won’t be able to afford “a proper Christmas”

With the majority of customers intending to reduce their spending, Christmas sales are expected to fall by 3% compared to 2021. Helen Dickinson, Chief Executive of The British Retail Consortium, sums up this year’s outlook:

“Christmas will come later than last year for many and there may be more gloom than glitter as families focus on making ends meet, particularly as mortgage payments rise.”

 

Meet the price-conscious customer

These predictions are a blow for retailers, but they shouldn’t come as a shock. Lower Christmas spending is the natural extension of the customer behaviour we’ve been seeing for the last few months. While pandemic customers were looking for speed and safety, the cost of living crisis has put the focus back on value for money:

  • 24% of customers are buying lower quality products
  • A third are relying on special offers and promotions
  • 29% say they are more likely to shop around for the best deal
  • Many are saving money on petrol by making fewer trips to the supermarket 

Worried about Christmas? Here’s how VoCoVo makes it easy to train seasonal colleagues.

 

Savings for life, not just for Christmas

This behaviour is more than a temporary blip. The reasons behind the cost of living crisis are deep and varied, and many experts believe that things will get worse before they get better. For the foreseeable future, customers will be shopping based on price and little else. 

This might sound grim, but there is also cause for optimism. Shoppers are searching for the best deals, and this creates an opportunity for stores that are willing to adapt. 

By shifting your focus from safety to value, you can win over this new breed of price-conscious customer. This is where we can help. Our system improves efficiency on the colleague side, creating savings that can be passed onto customers in the form of lower prices:

  • Headsets allow colleagues to communicate from anywhere in store. This reduces unnecessary walking by up to 1.4km per shift, saving each store over £440 a week. 
  • Headsets are hands-free, so colleagues can answer questions while they work. This sort of multitasking can improve task efficiency by 105 minutes a day, saving the average store £111 a week. 
  • Two-way call points can be placed on customer service desks, allowing colleagues to get on with other tasks during quiet periods. Unmanning a single desk can save your store £594 a week. 

As well as cutting your costs, our system also helps your customers to shop more economically:

  • Our message cast feature lets head office send updates to multiple stores at the same time. This can be used to spread the word about new offers and promotions, ensuring that your customers don’t miss out on savings. 
  • Telephony integration allows colleagues to take customer calls from the shop floor. Customers can call ahead to check on stock, saving them a wasted journey. 

VoCoVo lets you tackle the cost of living crisis head on. By reducing your own costs and helping customers to reduce theirs, you can make your store the natural choice for price-conscious shoppers. Download our report to find out more.

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