How is COVID-19 affecting Christmas business?

Christmas is just around the corner – and with it the busiest time of the year for the Swiss retail trade. This year, however, COVID-19 is also knocking on the door. 

Curse or blessing for Christmas business? We decided to find out.

Handshakes are passé, the mask our constant companion, the virtual world the new normal – the COVID-19 pandemic has mightily turned our lives upside down this year. With Christmas approaching, the mood is subdued for some, confident for others. But everyone seems to agree that it will be a unique Christmas. And Christmas business? Will it fall victim to corona like so much else, or will the urge to give be all the greater?

Much is different, much is unchanged

To find answers to these questions, EY conducted a representative study. Between November 11 and December 7, 2020, we had 400 consumers throughout Switzerland surveyed by telephone by an independent market research institute – with the aim of obtaining detailed information on planned purchases of Christmas presents. General consumer behavior in the run-up to Christmas was not the subject of our survey. And lo and behold: Even though COVID-19 has changed a lot, some things seem to have endured. The purchase of Christmas presents is also a fixed item on the agenda of Swiss consumers this year.

A bulging Christmas budget like never before

Sure, the anticipation of the festive season and the pre-Christmas shopping experience have been somewhat dampened due to the current circumstances and restrictions – this is what seven out of ten respondents say. But Swiss consumers are not letting this spoil their Christmas shopping – quite the contrary: According to our Christmas survey, the planned average budget for Christmas presents this year is CHF 327 per person, more than at any time in the last decade. The previous high of CHF 310 was recorded in 2018. Given the uncertain times, this figure is at first glance perhaps somewhat surprising, but at second glance it is understandable, as we have experienced an exceptionally challenging year because of the COVID-19 pandemic; many people are worried about the future or have lost loved ones. Despite or perhaps because of this difficult time, they now want to do something good for themselves and their families at Christmas.

Differences by sex and regions

The main drivers of the high budget are men. They tend to spend an average of CHF 393; their willingness to spend has increased by CHF 65 compared to 2018. In comparison, women shop much more modestly with an average budget of CHF 264; their propensity to spend decreased by CHF 27 compared to 2018. Families with children have a gift budget of CHF 399 and singles have one of CHF 221 – their budgets have remained relatively constant since 2018. The situation is different for childless couples. Their average budget this year is CHF 366, up CHF 59 from 2018. There are also differences between the various regions in Switzerland: With CHF 356, consumers in the Zurich region are particularly generous. The people of Ticino are the thriftiest, with an average of CHF 150.

Toys top, holidays flop

As in previous years, toys top the gift list in 2020, with an average spend of CHF 58, followed by gift vouchers and money (CHF 57), food and confectionery (CHF 46), books (CHF 27), and cosmetics (CHF 24). The fact that board games are among the most purchased items is not surprising in view of the ongoing pandemic – nor is the fact that trips and visits to events are gifted significantly less. The timing of Christmas shopping also remains unchanged: 59% of respondents buy their gifts in December as before.

Offline instead of online

The type of shopping is somewhat unexpected, however. There is no doubt that digitalization has experienced a huge boost with the corona pandemic. The virtual world made its way into everyone’s life in one form or another. We worked remotely, our children were home schooled, and we shopped online. It is all the more astonishing that Christmas shopping in over-the-counter retail still ranks very highly, despite COVID-19. Of the 400 consumers surveyed, 61% said they would buy Christmas presents in department stores/shopping centers and specialist shops again this year. Only here can the products be assessed directly and is expert advice available if needed – arguments that still hold water. Only 10% of respondents prefer to shop online. Although tactile, sensual, and emotional perception falls by the wayside on the internet, online shopping can be done around the clock and from home, which is especially beneficial for protecting health nowadays. On the other hand, 29% of respondents make use of both options. Thus the study clearly shows: Despite corona and the digitalization push, Swiss consumers are remaining true to their Christmas present-giving behavior in 2020. Christmas business is here to stay.