Accenture: Consumers to spend more this Christmas

05 December 2014 Consultancy.uk

Christmas shoppers plan to spend more this year than in 2013, with 27% indicating to spend £250 or more on shopping than last year, concludes Accenture in its Christmas Shopping Survey. A big portion of the Christmas budgets will be spent online, and the consumers who do so in-store would like to or will make use of online devices that show discounts and different prices, something retailers should respond to accordingly.

Consulting firm Accenture recently released the results of its online 2014 Christmas Shopping Survey, for which it researched a representative sample of 500 UK consumers, from different ages, education, income levels, and gender, in September 2014. The main conclusion of the survey: UK consumers are set to spend more this Christmas, than in 2013.

Of the people surveyed, 33% indicated their plans to spend between £250 and £500 on Christmas shopping this year. 31% plan to spend more on Christmas shopping this year with more than a quarter (27%) indicating to spend £250 or more on shopping than they did in 2013. More than half (54%) said to put money aside to pay for this shopping and 32% plan on taking advantage of special discounts, which are, according to 93% of the respondents the primary driver for spending decisions related to Christmas shopping.

Accenture - Consumers to spend more this Christmas

Christmas shopping trends
Accenture’s research reveals specific shopping trends of the UK consumers during their Christmas shopping. Online shopping will play an important role in this year’s shopping as 65% of the consumers plan to spend 50% of their Christmas budget online, main reasons for this are free-shipping (64%), discounts (51%), and easy-to-use websites (49%). Although much of the Christmas shopping will be done online, retail stores will not be left aside as 32% of the respondents say they “love the Christmas shopping experience of going to stores.”

Fiona OHara - Accenture UK & Ireland

The proliferation of smart phone use and advances in technology will lead to an increasing role for digital in the shopping done in-store. Just over a third (34%) of the respondents say that shopping while using a mobile device will ‘lead to better discounts’ and make it easier to compare prices while shopping in-store. As a result, 82% of the consumer surveyed plan to use or want to try mobile services that will offer them such real-time promotions and offers while shopping. “Mobility is having a dramatic impact on shopping in the UK. With over one-third of survey respondents saying they would use a mobile device in store to compare prices, it is critical for retailers to make it seamless for consumers to trade on mobile applications by incorporating social media and mobile technologies into their stores and multichannel environments,” comments Fiona O’Hara, Managing Director Retail at Accenture UK & Ireland.

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Consumer goods start-ups grow interest from venture capital

23 April 2019 Consultancy.uk

Funding the latest consumer goods start-up has been a real money-spinner for venture capitalist firms, with a number of $1 billion companies – or unicorns – having emerged in the space in recent years. New analysis has explored the resulting corporate consumer products activity in the acquisitions space.

Consumer products have enjoyed years of strong growth as new markets opened in developing Asia. China in particular has enjoyed strong growth across a range of consumer good types as the country’s middle class expanded. Private equity firms have been keen to pick up targets in the space as they expand their portfolios to include additional local capacity as well as customers in new markets.

As a result, a study from Bain & Company has found that interest from PE firms in the consumer product space grew sharply in 2018, hitting 6.1% of all invested capital for the year, and making it the third most sought-after category. It is now only behind financial services (23.9%) and advanced manufacturing and services (13.9%).

Corporate venture capital investment

The ‘M&A in Disruption: 2018 in Review’ research found that growth in the segment reflects key changes in the segment as a whole. This is particularly true of insurgent brands, which often leverage local expertise in order to take on international giants in domestic markets.

Short change

The market changes have led to shifts in motivations for consumer goods company investments from PE firms. The number of strategic investments stood at 50% in 2015 compared to deals that increased scope. This has shifted significantly, with 34% of deals focused on strategic outcomes in 2018 compared to 66% for scope. The move towards scope reflects companies seeking out fast-growing products that enable stronger revenue growth streams.

Acceleration in scope-oriented M&A in consumer products

However, there were other motivations for deal activity in the space. Activist investors have put pressure on companies to expand their portfolios in recent years, with the trend expanding from just US targets to Europe.

Further trends

The other key shift in the space regards outbound deal activity. The study found that outbound deal activity has increased significantly in the Americas (up 363%) with total deal volume up only slightly (15%). Key deals included Coca-Cola and Costa, Procter & Gamble and Merck’s consumer health unit, and PepsiCo and SodaStream. In the Asia-Pacific region, outbound deal activity rose 195% while total deal activity fell sharply, by -36%. The EMEA region saw both a sharp decline in outbound deal activity, at -68%, as well as lower overall deal activity, which fell by 32%.

Cross-regional deal making

Deal-making in the current environment is increasingly fraught with uncertainties, as business models change on the back of new technologies, new consumer sentiments and wider market changes from new entrants. As such, acquisitions are increasingly useful as possible hedges on changes in market direction. As such, companies are increasingly pressed to take a future-back position, making sure to incorporate a vision of how the company needs to look in five years into acquisition strategy.

The firm notes that certain acquisitions which enhance a remembrance of a nobler mission, revive a sense of entrepreneurialism and engage directly with consumers may be necessary qualities in acquisitions that transform a company to fit market expectations in the coming decade. While going forward, focus on innovation, partnering with retail winners, reducing cost base and constantly reallocating scare resources will be necessary to protect market share in areas where insurgent local and strategic competitors are active.

Related: Private equity asset growth top priority for 2018.