Almost 50pc of Irish people will shop online this Christmas

9 Nov 2010

Although Christmas spending throughout the Irish economy is set to fall 10pc this year, some 46pc of Irish consumers will be buying their presents online.

Irish consumers will spend on average 10.6pc less this Christmas, according to the annual Deloitte consumer survey of Christmas spending. The reduction in spending on this year’s festivities is considerably more than the European average of 2.5pc.

Ireland remains in second place in the European spending table behind Luxembourg, however, the average spend has now reduced by more than 30pc since 2008. The average spend per household in Ireland this Christmas will be €1,020. This is significantly higher than the average European spend of €590.

Speciality chains (24pc), hypermarkets (16pc), traditional department stores (14pc) and the internet (11pc) are the preferred locations for purchasing gifts this festive season.

However, 46pc of Irish consumers indicated they will buy gifts online this year. On average, consumers will spend just over a third of their gift budget on the internet, emphasising the fact the internet is becoming a shop just like any other.

Significantly, it has been identified as the No 1 channel for buying gifts in both the UK and Germany.

Some 41pc of respondents intend to spend more on the internet this year. The main reasons identified for shopping online are lower prices than traditional stores (79pc), the convenience of home delivery (70pc) and to avoid crowded stores (63pc). Search engines (68pc) and retailer websites are the main information sources for Irish consumers.

“While the Christmas spend in Ireland is still high compared to many of our European counterparts, Irish consumers are becoming increasingly prudent in their spending patterns,” Susan Birrell, Consumer Business Partner, Deloitte said.

The importance of being prudent

“What’s more, with what promises to be a very tough Budget looming in December, Irish consumers are likely to become more cautious in their spending during the festive season.

“Irish consumers are now spending nearly a third less on Christmas since 2008. That said, the drop in spend this year is not as significant as last, and consumers have also indicated that they are feeling the fall in spending power less acutely than in 2009. Sixty-three per cent of our respondents identified that the main reason for spending less is the economic downturn and the belief that it will get worse. Forty-one per cent indicated it was because they are in debt.”

The way in which Irish consumers will finance their Christmas purchases has also changed – 46pc indicated that they will pay more by cash, while 31pc indicated that they are saving more. Forty-two per cent also indicated they are using loyalty points more, which should encourage retailers to expand and promote their loyalty programmes.

Birrell said: “The survey emphasises the importance that retailers will need to place on their strategy this festive season. The mainly price-driven strategy that consumers have adopted will lead them to seek out information on where they can find the best prices and special offers. It will also have an impact on the mix of products purchased – something retailers will have to take into account in their merchandising.”

Despite the increased frugality being displayed by Irish consumers, the majority of consumers (76pc) do not intend to buy second-hand products this year as Christmas presents. This trend runs contrary to other European countries, where it promises to expand into the future.

Once again, some Irish consumers will use the festive season as an opportunity to forget the current economic woes. Of the minority that will spend more over the festive period, the main reason to do so is to enjoy themselves and avoid thinking about the economic situation!

Christmas wishlists

Gift vouchers have now become the most wished-for gift in five European countries (including Ireland) in 2010, highlighting how consumers now wish to receive gifts with a high utility value.

Top 10 most wished for adult gifts:

  1. Gift Vouchers
  2. Books
  3. Clothes/shoes
  4. Cash
  5. Cosmetics/perfumes
  6. Food/drink
  7. Travel
  8. Tickets (theatre/concert/sports match)
  9. Jewellery/watches
  10. Gift cards

Top 3 adult gifts most likely to be purchased:

  1. Cosmetics/perfumes
  2. Gift Vouchers
  3. Books

When purchasing gifts for the under 12s this year, educational games (45pc) are the most favoured option, followed closely by books (43pc). This is in line with the rest of Europe, as educational games were the top-ranked present in almost all European countries. Only 28pc of respondents in Ireland indicated they would buy video games for children this Christmas.

With regards to buying for teenagers, gift vouchers are the preferred option, as identified by 34pc. This is followed by music (32pc) and clothes/shoes (29pc).

Perhaps somewhat surprisingly, gadgets are not among the most popular gifts that will be bought for teenagers, whereas they rank among those that teenagers most hope to receive.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years