Thoughts from Greg Tufnell: Consumer Partner & Managing Director of Prime Advantage Capital Partners

Black Friday and Cyber Monday (BFCM) in 2024 were the biggest to date, with Klaviyo reporting that over 15,000 brands experienced their best sales day.

This peak sales period significantly impacts on a retailer’s year. It’s therefore essential to assess and plan now for the next one, keeping a close eye on evolving trends and longer term influences that are expected to dominate in 2025.

The customer journey is now fully multi-channel, originating from multiple touch points and experiences.

Some of these are throughout the year and before the peak of BFCM and the Christmas holiday period, whilst others are solely at the peak period.

Therefore, everything must be integrated, avoiding silos whether that be structures, planning, marketing, products, availability or financials.

I have heard that “90% Of Success Is Preparation” – it’s therefore important to start with reviewing what happened and planning now for the months ahead and Christmas 2025.

Key Trends & Highlights

Consumers shopped earlier for Christmas 2024: This was notable, even back into September and October, to spread and manage the cost of Christmas.

AI: This is being adopted quickly, with gift discovery, recommendations and virtual assistants, and millennials particularly adopting this route to buying.

China’s Shopping Platforms: Millenials have been moving to Temu and Shein with Chinese shopping apps expected to have captured $160bn in global e-commerce sales outside China in Christmas 2024.

Loyalty: Very important, with over 60% of customers choosing to shop where they receive rewards, points or benefits.

46% of customers rank loyalty programmes as the 2nd most important influence on their buying decisions, with only price ranking higher.

Retained customers, therefore, are a high priority, especially as Meta and Google cost more at this time of year and ROIs fall as customers cross shop.

Estimates indicate that repeat customers might only be 20-25% of traffic, but well over 40% of sales, plus they come with no new cost of acquisition.

Brand Websites: Key to success, providing authenticity, expertise and the best experience.

Social Media: Reviews are significant influencers of Christmas shopping, but social media is not in itself a significant shopping channel, with only 13% of consumers intentionally using social media to purchase.

However, 59% use social media for discovery, with Facebook still being the leader.

GenZ is the most heavily influencer-led shopper at Christmas, favouring and trusting who their peers follow over brand, paid influencers or user generated content.

Product: Poor product does not sell at “70% off”, especially if it is a “gift”.

Blanket discounts of “X% off everything” no longer resonate with customers, destroy margin and leave the business with the same poor sellers in stock after the period.

In comparison, customers are waiting for the right incentive, on the right product, from the right brand, meaning a smaller discount on the right product results in significant success and at higher margins.

Longer Term Influences

Tik Tok: Tik Tok Shops UK sales increased on Black Friday by +179% v previous year, with over 6,000 live shopping events per day and 1.6m shoppable videos.

Purchases (rather than discovery) were primarily SME businesses in beauty, fashion, home and living.

Following Amazon’s recent joint venture with Tik Tok, this will only expand this space and focus for retailers.

Pre-Loved: 64% of consumers considered pre-loved gifting due to both the cost of living and a commitment to sustainability.

However, to succeed this needs to be presented correctly as “vintage” or “pre-loved”, rather than the fear of gifting “used’ or “second-hand”.

It’s important to focus on style, quality and original brand/price for luxury, or circular economy trade in and credits.

InStore: Retail store traffic increased by 5% v previous year on Black Friday and +17% in the week overall.

49% of UK shoppers planned instore purchasing, and surprisingly 82% of GenZ and 73% of Millennials.

Half of customers who bought online and picked up in store bought something whilst they were there; a similar pattern occurs even when returning purchases.

The direction and general recovery of the sector is expected to continue in 2025 generally, further evidenced by the commitment to new retail openings and investment.

2025 Guidelines: What Retailers Should Be Planning And Doing Now

Earlier and earlier: 

• Use incentives and rewards, but not too Christmassy, too early.
• A Christmas Wishlist being available, but not Christmas site wide.
• Set up re-targeting and abandoned flows early to match the interest levels and traffic levels increasing.

AI:

• Adopt for planning, marketing and timing, as well as demand planning.
• Use data to drive personalisation and segmentation of customer marketing strategies.
• On site AI powered recommendations, personalisation and chat ideas.

Loyalty & Retention:

• It’s estimated that 55% of customers are using Loyalty Schemes and redeeming points to reduce the cost of their shopping and purchasing, from grocery right through to holidays.
• Prioritise the loyalty and retention programme all year round to maximise the key period, not just in these weeks.
• VIP benefits, exclusives, early birds and holiday specials.
• With lots of traffic during this period, increasing database numbers is a priority KPI.
• Make it personalised.
• A ‘thank you’ campaign post Black Friday/Christmas, to generate ongoing loyalty.
• Email is the best ROI of all channels, from new campaigns to automated flows.

Brand Website:

• Even with the rise in marketplaces, the wide range of brand discovery routes and shopping channels, don’t forget the importance and UX of the flagship brand website.
• Accentuate the quality of shopping experience from loading times to content, from imagery to gift guides, and from product to availability and delivery.
• Ensure payment and delivery simplicity plus great mobile optimisation, as mobile will have accounted for 50% of sales and 75% of traffic.

Discovery v Purchase:

• Drive traffic with engaging, discovery led content versus direct selling.
• Next, ensure that customer transition to the website is immediate and seamless.
• Lead Gen strategies need to begin earlier, especially when it is cheaper.

Christmas Spirit:

• Despite tough times, don’t forget the Christmas Joy and Christmas Spirit!
• Help customers by offering a range of products that are accessible, bundles to create value and payment options, with Buy Now Pay Later accounting for at least 10% of sales.
• Christmas spending, like holidays, is being protected even when budgets are under pressure. All supermarkets, for example, reported significant growth in premium categories.

Integrate:

• Everything across the business, from customer experience to your data, has to be integrated to maximise business performance and outcomes for the short and longer-term benefit of both customers and the brand.

2025 Outlook

In summary, this is the period when most consumers shop and visit your business and website – the “right” all round brand experience will mean they will continue to shop with you way after the decorations come down!

It’s never too early to plan for Christmas, and retailers need to be busy preparing and planning now to ensure Christmas 2025 is a successful one.