Christmas 2013: Consumers in Europe

While for many European families this Christmas is yet another exercise in restraint, other consumers will seek out expensive gadgets and exclusive designer pieces. What most consumers across Europe have in common at this time of year, though, is a return to family values, a celebration of friendships and copious opportunities for eating, drinking and being merry. These and other topics will be examined in this year’s look at how European consumers are approaching the Christmas period.

Key Trends

  • Multi-channel shopping;
  • Dreaming of a cheap Christmas as stockings remain half empty;
  • Pre-Christmas cheer: a collective return to childhood;
  • Eastern Europe less consumerist;
  • Similar presents for young and old;
  • Thinking about the less fortunate.

Commercial Opportunities

  • Online shopping will become more important each year, as smartphones and tablets facilitate shopping; The increasing sophistication of smart device functions is providing users with the
    convenience of shopping on the move, with apps facilitating the experience;
  • As budgets shrink, food and drink will be one of the areas that remain important at Christmas. Families will not stint at festive meals;
  • Second-hand items, upcycled products and bargain hunting are growth areas for “green” consumers searching for sustainable presents.

Background

Christmas is the time when wishes are fulfilled, dreams become true, and more money is spent than throughout the year. Digital media are both facilitating the shopping experience and the object of desire. For many less affluent consumers, Christmas is a time to give presents that are useful, to enjoy the increased social activities on offer and to gather at home to enjoy food, drink and company. For the media, it’s a time of increased advertising, as in the UK, where the department store John Lewis leads the Christmas advertising round by launching a £7 million Disney-style campaign across conventional and social media.

Multi-Channel Shopping…

In its Christmas Spending Survey 2012, the consulting company Deloitte identified the ways in which Irish consumers search, compare and buy products, both online and in stores. Digital technologies including mobile and social media play an important role in gift research and comparison. The survey found that 43% of respondents indicated that they use both websites and stores to search for products and 55% use both for comparing products. 72% of respondents indicated that they will buy in-store, while 28% will use both e-commerce and m-commerce methods of purchasing.

In Germany, downloads of books, music, games, films and software now have an 11% sales value share in the entertainment market, according to market research company GfK, with e-books taking a 40% share, which is expected to grow in the run-up to Christmas. Amazon is facilitating this in its Kindle store with the “Give as a gift” function. One growing clothing segment is luxury lingerie: despite the dire economic conditions in much of Europe, Euromonitor International predicts that women’s underwear will see some of the strongest growth rates in women’s
clothing.

Dreaming of a Cheap Christmas as Stockings Remain Half Empty

Europe’s crisis regions continue to tighten their purse strings at Christmas. Spanish retailers are looking at yet another tough Christmas as the average sum spent on Christmas presents, toys, lottery tickets, food and leisure was down to €560 in 2012 (€114 less than 2011) and falling. People from Madrid, Valencia and Catalonia are the country’s biggest spenders. Meanwhile in Greece, sales in the run-up to Christmas were down by 20% in 2012, with worse business expected this year, according to the Hellenic Retail and Business Association. As consumers are looking for bargains, internet retailing in Greece has been registering rising sales every year since the economic recession, with further room for growth expected.

According to Bronislav Pánek from Deloitte & Touche, “Czechs want to enjoy the Christmas holidays and put the economic crisis and their own problems aside for a few days”. The survey also found that Czech children will receive five presents on average this Christmas, with electronic toys and gadgets a firm favourite. However, Radio Prague reported retail industry sources as saying that parents appeared to be inclined to combine costlier electronics with cheaper wooden toys and family board games this year.

Savings Ratio as a Percentage of Disposable Income in Eastern and Western Europe: 2007-2012

Source: Euromonitor International from National Statistics

Pre-Christmas Cheer: A Collective Return to Childhood

The Christmas season starts earlier every year: some complain about the loss of magic as from October discounters are full of fairly light chains and other glitzy Christmas decorations, and Lebkuchen and gingerbread make their first appearance on the shelves of supermarkets. As soon as the clocks go back, windows and gardens, from the UK, Germany and Scandinavia to Italy and Spain, are adorned with all manners of twinkly stuff.

If the pre-Christmas period can be a time of anxiety and stress about buying presents, it is also an opportunity for collective euphoria for the Christmas lights in Oxford Street or Rome’s Christmas lights programme, ‘Roma si mette in luce’. In Holland, residents come together as in the town of Gouda the Christmas lights are switched on. Thousands of tourists visit the myriad brightly-lit Christmas markets, fragrant with mulled wine, while many enjoy their Christmas shopping in London’s spectacularly lit-up West End. In Denmark, the annual release of Tuborg’s Christmas beer, Julebryg, and the accompanying free samples in bars, provide cheer of a different kind.

Eastern Europe Less Consumerist

Christmas in Eastern Europe has a greater spiritual emphasis, with far fewer presents being exchanged than in the West. In Lithuania, like in most predominantly Christian countries, the festive season offers an opportunity to spend a peaceful time with the family, decorate a Christmas tree, cook and bake and eat together. But it’s fair to expect that the new IKEA store, the first in the Baltics, will be a source of presents this year, as the Lithuanian Tribune predicts that “IKEA’s popularity will win over low- and medium-income consumers in Lithuania, just as it has done around the world.”

Catholicism is particularly strong in Poland, where there is a focus on praying and attending midnight Mass. Across many Eastern European cultures, including Lithuania, Poland and Ukraine, a twelve-dish Christmas Eve supper is traditionally prepared, consisting of twelve meatless dishes representing the twelve Apostles. In Serbia, a very strict period of fasting (Christmas Fast) is observed by a great majority of Orthodox Christians, with Christmas Eve, the end of fasting, celebrated on the 6th January with over-the-top feasts. Presents are given on New Year’s Day, a hangover from communist times. Deana, an expatriate Serbian living in Germany, observes that “People are definitely not as consumerist as here in Germany where the scale of it is really worrying, if you ask me. [Serbian] people do exchange presents, but I’ve never got more than one present from one person, regardless of the occasion”.

Similar Presents for Young and Old

The new 5th generation iPad will be found under many a Christmas tree and in stockings across Europe this year, as well as iPhones (especially the hugely popular gold-coloured iPhone 5S), smartphones with the instagram app, electronic learning aids, and games for the Wii U (the less popular successor to the discontinued Wii console). UK-based retailer John Lewis expects the new iPad Mini to be the company’s best-selling electronics product this Christmas.

The squidoo.com website lists among “must-have toys” the Ben 10 cruisers, a Swarovski Crystal model of a Mercedes, Barbie Video Girl, a dancing rubbish garbage truck, the Go Go Kung Zhu hamsters and Lego Fire Station. Clothes, Lego, bikes for children and sportswear remain classic presents: in Eastern Europe, value sales of sportswear grew by 8.6% in 2012.

Thinking About the Less Fortunate

Christmas is also a time for thinking about those less fortunate, as do students at Loughborough College who prepare hampers with the Carpenter’s Arms charity, to send out clothing and food items to homeless and disadvantaged people in the area, or the residents of twelve houses down a cul de sac in Southampton, who are raising money for a local children’s charity with their collective Christmas lighting. Munich newspaper Sueddeutsche Zeitung has an annual “Advent Calendar” in the run-up to Christmas which introduces families and individuals in
need of support. And the days after Christmas usually provide a bonanza for charity shops, where unwanted presents are discreetly disposed of.
­

Outlook

Euromonitor International research shows that European middle class income is shrinking, with households predicted to cut back on their spending, especially on non-essential items, and save more. Currently, the French are the top savers in Western Europe, putting aside 15.6% of their income. But despite financial worries in some parts of Europe, the bulk of European consumers will continue to make an effort to make Christmas a cheerful, generous time, treating themselves and their families by spending on food, electronic gadgets, toys and clothing.