UK’s most digital Christmas ever: what retailers can expect from shoppers

Throughout the last 18 months, the one consistent in retail has been change. Whether triggered by Covid or Brexit, this change has been very hard to predict. So we’ve started to look on a monthly basis at a combination of search data and survey insights to explore a number of key retail themes, to try and do our best at understanding these changes.

Trying to map the changes in retail category demand in search, the relationship between retail and hospitality as Covid restrictions continue to ease, and how attitudes to loyalty and value change over time can help form a valuable picture for retailers and manufacturers.

Our latest retail index in September looked at August, a month when job vacancies exceeded one million for the first time and the energy crisis was starting to cause concern – but consumer confidence was buoyant. Spending was up 15% vs the same month in 2019, and importantly non-essential spend growth overtook essential spend growth for the first time since the pandemic began.

Through a combination of survey and search data, the top takeaways from our index show:

We’re seeing a normalisation of demand. The lifting of restrictions caused significant shifts in search queries across hospitality, travel and tourism. Queries spiked over April, May and June whilst retail categories, such as consumer electronics, food, groceries and apparel, dipped after a sustained period of growth since the start of the pandemic. We now seem to have passed this ‘shock’ phase which came with the opening of non-essential retail in April.

Online grocery shopping search growth dipped significantly in March and has been in decline since then, as consumers are more and more comfortable returning to stores. We are seeing this normalise now, too, as online demand seems to be closing in on last year’s levels – but remains at much higher levels than pre-pandemic.

Consumer mobility is closing in on pre-pandemic levels and stabilising. Alongside this, retail queries are rising with mobility for the first time this year, and both now seem to be stabilising at levels similar to those seen this time last year.

Consumers are also already thinking about Christmas. Our survey data shows the focus this year is as much on spending time with loved ones as it is spending on gifts. The majority of shoppers plan to shop primarily online this year, which will obviously differ for grocery shopping – however we still expect to see UK grocery’s most digital Christmas ever.

At least 2020 was predictable in the sense there was unprecedented demand across all retail categories, and in particular grocery. As Christmas fast approaches, in a usually very traditional and thus predictable time of year, it is going to be fascinating to see how the various challenges we’re facing across the UK will shape consumer demand and behaviour. We won’t be the only ones trying to understand it better, and of course those who do it well will no doubt have a great festive season and beyond.