Christmas is a favourite time of year for many people. But how do “just about managing” (“JAM”) families, who have been the main focus of Chancellor Hammond’s recent Autumn Statement, cope with the costs they face during the festive season? These are UK families who’ve seen their disposable income plateau or even decline over the past decade.
On average, working households earn no more than in 2007/08. (Source: ONS, Aug 2016).
We travelled to West Yorkshire to find out more about their Christmases and how marketers can target them.
Nostalgia and ritual
It appears that ritual is more important than at any other time of year. The festive period gives adults a chance to re-live their own childhood, giving their own kids the Christmas excitement they had, or perhaps never had. When it comes to marketing, brands should keep in mind two things – nostalgia and sentiment.
Families increasingly spread the fun with events in the run up to Christmas with events like Winter Wonderland, a visit to Santa or activities like ice-skating. It’s difficult to over-estimate how important Christmas is to some families; it can be the highlight of their year. However, for some, the day itself can be a bit anti-climactic, with so much preparation having gone into it. Not to mention a lot of spending.
Families tend to stick with retailers they know and trust for their Christmas shopping. Rather than paying an annual visit to a premium store, they’re likely to try more premium brands and variants in their regular store, or be tempted by festive packaging. As Christmas is traditionally a social time of year, alcohol consumption is at an annual high. Such luxuries are particular to Christmas (and perhaps summer holidays).
The menu for Christmas day is already planned, over a month in advance. Families will then shop around familiar retailers, looking for deals on the most expensive items – e.g. joints of meat, alcohol.
The average household spent £794 on Christmas in 2015, with just over a quarter of that on food and drink. (Source: Centre for Retail Research, 2016)
Christmas TV ads are well liked and make people feel more positive towards the brands but naturally, no-one admits to be swayed by them. It was notable that the John Lewis ads were spontaneously recalled by all families, alongside mentions for Waitrose, Aldi and Lidl.
The consensus is that there’s more TV watching and less going online at Christmas – TV plays an enormous role in family life over the festive period, particularly on Christmas Day. In some households the TV is on for most of the day. It can intensify or even create the highs. It also helps the lulls to pass by. Even when it’s not being closely watched, TV, alongside radio for some families, often provides the soundtrack to Christmas.
Although the role of the TV schedule has diminished over recent years, it still plays a big part in shaping the Christmas experience. For families, the TV schedule helps to create a timetable for the Christmas period, pin-pointing shared appointments-to-view for the family.
Parents don’t spend as much time online on Christmas Day and the days surrounding it. In amidst the preparation, assembling their kids’ toys, and tidying up afterwards, there simply isn’t enough time.
Christmas presents, and the budget for them, are planned from summer onwards. Families put money away every month, or work extra shifts specifically to pay for Christmas. For some, there’s a clear mental link with present buying potential and how much they work in this period.
The families noted that after Christmas, it’s time to start saving for the summer holiday. It’s these two events every year that dominate financial planning. With this in mind, it’s important for brands to speak to these families early about Christmas. A lot of families have done most of their gift buying by the end of November.
Many families are wary of debt, all claimed to save and plan. However, they recounted tales of neighbours and families they knew getting into credit card debt, or using local loan sharks, to pay for Christmas.
Almost one in five adults was still clearing last Christmas’ debt in November. (Source: uSwitch.com, 2015)
Brands are more important at Christmas, particularly when thinking of gifts for adults and tween/teen children. It’s a signifier of quality and the value placed on the relationship with the recipient.
eBay and Amazon dominate online retail. But the dates of the major supermarkets’ toy sales are clearly marked in the diary.
So what does this mean for you?
Christmas has always been, and will continue to be, the biggest time of year for brands. Nostalgia plays a big part in family traditions and how Christmas holidays are spent. Budgeting families start thinking about Christmas very soon after the summer holidays. It’s important for brands to keep both these factors in mind when thinking about their marketing.
Many families rely on sales and/or promotions in the lead up to Christmas. They are savvy shoppers; they will compare prices online, and seek out the bargains, particularly for children’s toys. Higher-end brands are important for older members of the family, where value and quality is a significant factor in gift giving.
Even though they’re on a budget, an area where families will spend a little more is quality food and drink. Grocers and other retailers can entice shoppers with festive packaging that reflects the special occasion.
TV plays a massive part in family life over the festive period, particularly on Christmas Day. It’s important for brands to still have a large presence on TV and if done well, their ads can be bring positive associations for many years to come.