Consumers opted for ‘wise gifting’ last month as luxury goods took a backseat

British shoppers weren’t thinking about extravagant spending this Christmas. Quite the contrary, there was a “clear shift towards judicious spending, favoring useful and practical gifts over luxury and extravagance.”

These are the findings of e-commerce provider Visualsoft, which points to the fact that overall Christmas revenue fell by 4% compared to 2023, but average order value (AOV) increased by 21%. , which “reflects the growing influence of thoughtful shopping and retailer incentives.” ”.

And this thrifting appears to have begun during Black Friday and Cyber ​​Monday, “setting the tone for a realistic and planned festive period.”

Although total orders were down 15% compared to 2023, the rise in AOV “demonstrates consumers’ willingness to spend more strategically, with free shipping standards, loyalty programs, and bundled offers encouraging shoppers to fill their baskets.” I encouraged them to increase the size.”

And the theme of practicality continued into Boxing Day, with sales in categories related to practicality and everyday improvements also showing impressive growth. Revenue in the DIY segment increased 173% year over year. Office supplies increased by 35%. Sales of home furnishings were up 10% year over year, and electronics were up 56%.

On the other hand, sectors traditionally associated with luxury goods such as health, beauty, and cosmetics were down 20%, fashion was down 27%, and footwear was down 28%. Revenues have fallen significantly, suggesting a move away from lavish spending for many. ”

And retailers’ strategies appear to be paying off, adapting to changing habits by adopting strategies that maximize transaction size, such as free delivery thresholds, loyalty programs, and points-based incentives. It also extended the sale period to allow shoppers to spread their budgets over the season, “minimizing the pressure of last-minute purchases.”

said Ashley Wright, Chief Commercial Officer at Visualsoft. “Around Christmas 2024, we saw a decisive shift in consumer behavior, with shoppers prioritizing practicality and long-term value over temporary luxuries. It’s not a reaction to economic pressure; it’s a sign of more thoughtful spending.

“It’s a wake-up call for retailers to focus on value-driven promotions and offering meaningful incentives like free shipping and perks. Shoppers are telling us what’s most important to them, and we’re listening. Those who lean will be best positioned to thrive in 2025 and beyond.”