Digital River, an experienced global commerce enabler for established and fast-growing brands, has revealed that over a third (37%) of UK consumers expect to be spending less at Christmas this year. The finding is part of new research, conducted by Opinium exploring how consumers’ spending habits have changed due to rising inflation and the cost-of-living crisis.

More than half (58%) say they have reduced their spending on non-essential items. This is followed by reducing spending on travel (37%), essentials (32%) and utilities (28%). When asked, less than a quarter of adults (24%) said they hadn’t done anything to reduce their spending in the past six months.

Retail response

Retailers need to accommodate to current consumer challenges to maintain customer loyalty. When asked what would be most helpful for retailers to offer to help with the cost of living, 48% of respondents said free or reduced delivery fees, 38% said more vouchers and options, while 31% said ways to compare prices with other retailers.

Online spending remains strong

Despite less overall spending, online shopping is likely to help people browse for the best deals ahead of Christmas this year, with one in three UK adults (33%) saying they have shopped online more frequently in the six months prior. Of these people, half (50%) said this is because it’s more convenient, while 30% said it’s because of items being cheaper online and another 30% said to avoid travel costs. Despite general cutbacks in spending, just under half (47%) of UK adults say they make an online transaction at least once a week.

Over a quarter of UK online shoppers (29%) say they find it easier to track online prices compared to 19% who think in-person prices are easier to track. However, half of UK online shoppers (50%) say they want more help from retailers to deal with rising prices.

“It is clear that UK consumers will be making cutbacks this Christmas and brands may struggle if they don’t respond to this strategically,” says Ted Rogers, Chief Revenue Officer at Digital River.

“It is not all doom and gloom, as the research shows that shoppers are still keen to spend online and are more likely to do so if offered more support from brands, including a frictionless digital experience. Retailers should offer reasonable delivery prices and extra perks such as vouchers to entice customers.”