Extravagant spending wasn’t on the minds of UK shoppers this Christmas. Quite the opposite, as there was a “clear shift towards sensible spending, prioritising useful, practical gifts over luxury and indulgence”.

That’s the findings from e-commerce provider Visualsoft, which points to the fact that while overall Christmas revenue dropped by 4% compared to 2023, average order value (AOV) rose by 21%, “reflecting the growing impact of thoughtful shopping and retailer incentives”.

And this frugality seems to have begun during the Black Friday/Cyber Monday period, “setting the tone for a practical and planned-out festive period”.

Although total orders were down 15% compared to 2023, the higher AOV “demonstrated consumers’ willingness to spend more strategically and free shipping thresholds, loyalty programmes, and bundle offers encouraged shoppers to increase basket sizes”. 

And the practicality theme continued through to Boxing Day as the sales also saw impressive growth in categories tied to utility and everyday improvements — DIY sector revenue surged 173% year-on-year; office goods up 35%; and home furnishings sales lifted 10%,and electrical goods jumping 56% on year.

On the other hand, sectors traditionally associated with luxury, such as health, beauty, and cosmetics were down 20%, fashion fell 27%, and footwear dipped 28% all “experiencing significant declines in total revenue, despite AOV rising, suggesting a move away from indulgent spending for many”.

And it appears retailer strategies paid off, adapting to changing habits by employing strategies to maximise transaction sizes including free delivery thresholds, loyalty programmes and points-based incentives; and extended sales periods to help shoppers spread their budgets across the season, “minimising the pressure of last-minute purchases”.

Ashley Wright, chief commercial officer at Visualsoft said: “Around Christmas 2024, we saw a definitive shift in consumer behaviour, with shoppers prioritising practicality and long-term value over fleeting luxuries. This isn’t just a reaction to economic pressures; it’s a sign of more thoughtful spending.

“For retailers, it’s a wake-up call to focus on delivering value-driven promotions and meaningful incentives like free shipping and rewards. Shoppers are telling us what matters most, and those who listen will be best positioned to thrive in 2025 and beyond.”