Will it be a happy Christmas for UK retailers? After the coronavirus pandemic squeezing the life out of the high street, they certainly deserve some cheer. Data shows their fortunes could be resurrected by ecommerce. But given the shift to online, and the evolution of shopping habits, what does it mean for the traditional retail calendar?
New data from Adobe indicates activity around key retail dates will begin earlier, and peak retail occasions will be higher and more prolonged. According to the software giant’s international president Paul Robson, online holiday sales will “shatter all previous records”.
This is supported by Adobe’s projections that, in America alone, Black Friday will generate $10 billion (£7.5 billion) in online sales. “That’s a 39 per cent year-on-year increase,” says Robson. “Cyber Monday will remain the biggest online shopping day of the year,” he continues, adding that $12.7 billion (£9.6 billion) is expected to be spent in the United States, up 35 per cent on last year.
Robson says: “Our research into the online shopping habits of UK consumers during lockdown found that while they were up to four times more likely to buy from marketplaces like Amazon, it’s not always at the expense of smaller independent retailers. Where marketplaces may have the edge when it comes to convenience and speed, shoppers have also shown they are keen to support local, independent retailers where they can.
“The extended shopping period, coupled with the ability of independent retailers to deliver great, personalised digital experiences, could see them have a happier Christmas period than many might expect.”
Looking beyond traditional retail peaks
Google data also implies the retail calendar needs updating. “As a direct result of COVID-19, we have witnessed heightened search queries for online retail this year that will lead to a new baseline for Black Friday,” says Becky Power, director of consumer retail and technology at Google UK. “Google searches for ‘early Black Friday deals’ were up by 150 per cent versus November 2019.” Further, Google searches for “Christmas shopping” are up 1,800 per cent compared to the same period last year.
“The message is clear: consumers are looking beyond traditional peaks in the retail calendar as they continue to enjoy the flexibility of browsing online,” says Power, who points out that Enders research estimates there will be an additional £4.5 billion-worth of online sales in 2020.
Retail owners must keep pace with customer expectations and arm themselves with technology that enables multi-channel personalisation and improves data analysis. “Given that a continually growing number of consumers are already shopping online for traditional peaks, retailers will have to adapt to be ready for this rise in demand,” says Power. “Digital tools are imperative for applying product promotions easily and quickly, boosting retailers’ visibility to new customers, and can uncover meaningful insights from their performance.”
Kyle Harbinson, of global technology consultants REPL Group, agrees. “To reduce the impact of the troughs, retailers need to connect with and understand the circumstances of their customers, in a dynamically changing environment,” the consulting partner says. “We are in uncharted territory, so retailers need to pivot from instinct-driven decision-making to a data-driven culture.”
Taking steps to bolster the online offering
Warnings are being heeded. Capgemini’s annual Holiday Shopping Survey reports that while more than a third (36 per cent) of UK retailers expect an increase in holiday sales compared to previous years, 91 per cent have taken deliberate steps to bolster their online offering. Almost half (47 per cent) have improved their ecommerce propositions and 52 per cent will offer more generous discounts both online and in-store.
However, Dr Rajesh Bhargave, associate professor of marketing at Imperial College Business School, cautions that one issue retailers will face post-COVID-19 is the dilemma of “sticky prices”. “Consumers tend to remember what they would have paid previously for a product, so would view price increases as unjust in poor economic conditions,” he says. “Similarly, cutting prices would erode pricing power.”
No retailers should be discouraged from embracing ecommerce, however, stresses author and business consultant Erica Wolfe-Murray. “The hype surrounding traditional retail peak days has a halo effect across the board whether you are actively marketing or not,” she says. “But the benefit ecommerce brings allows you to create and build your own peak retail event. Think ‘Founder’s Day’, ‘Dress-Up Day’, or whatever.”
Embracing technology is business-critical
Technology can also help with the morphing of traditional peak retail periods, from dealing with stock management and the supply chain, to predicting when more staff might be required. Or with improving the delivery process, posits Mike Hancox, chief executive of UK couriers Yodel. “The five months stretching from November to the end of March have long been the busiest period for those in logistics as they encompass retail’s traditional peaks of Black Friday, Christmas, Valentine’s Day and Mother’s Day,” he says.
“This year we’re expecting Christmas to be higher in intensity and longer in duration than previous years, but a greater increase in overall volumes means the fluctuations seen in previous years could be less pronounced in the future.”
Yodel has developed a parcel-scanning app to streamline the delivery process. “It gives more flexibility to the growing numbers of self-employed couriers out on the road who can download the app on their own devices rather than having to get up to speed with a handheld terminal.”
Striving to reduce touchpoints and frictions through tech is now business critical, argues Professor Laurent Muzellec, founder and director of Trinity Centre for Digital Business. “Big digital players such as Netflix, Amazon and Apple use artificial intelligence to produce an effortless experience; this should be a source of inspiration for all retailers,” he says.
Retailers that act on this advice and tailor their offerings, both online and offline, look set to have a happy Christmas and beyond.