We all know what happened over the festive period; a rise in grocery sales against fashion, brands with a differentiated offering excelling and online growing for both multichannel and online only retail. Retailers learnt some valuable lessons this Christmas, whether this was the sale hangover from Black Friday or the increasing dominance of sofa shopping. Even with the tech revolution hitting retail and companies taking measures to adopt a more engaged customer strategy, Christmas remains, and will remain, the toughest and most interesting period of the year.
Oxford Street was adorned in red and white sales signs well before Black Friday. Christmas taught us that not all customers are created equally and sometimes standing out from the crowd can pay off. M&S, for example adopted the longer term approach of permanently reducing the price of key lines to stay competitive and had their best Christmas in years. Maybe this is exactly what M&S needs to reverse its fortunes.
Black Friday has spread as an invasive species from America, like retail’s very own grey squirrel. Every retailer has its own approach to the festive period, maybe staying true to your brand identity instead of succumbing to unsustainable discounting is part of the solution. Fortnum & Mason went with this strategy of sticking to its roots and saw a 16% increase in like-for-like sales over the period. There is much to learn about discounting from sustainable fashion brands which instead of offering price-slashing discounts, made a charitable contribution based on your purchase.
The predictable growth of ecommerce shouldn’t be a shock. However, it is too often associated exclusively with a company’s web capability rather than a real understanding of customer habits and preference. It isn’t just about establishing a good experience, although that is a necessary place to start. John Lewis is an example of an established British retailer that saw an online sales rise considerably faster than in-store.
“In the run up to Christmas, customers turned to retailers they trust to deliver on time and within a window that fitted their busy schedules.”
Without this supply network and brand confidence consumers will take their business elsewhere – convenience over loyalty. Unsurprisingly, Amazon’s and ASOS’s broad retail offerings and unlimited delivery options proved very tempting for customers.
Consumer confidence in grocery could be testament to the improving ranges offered by the discounters. Aldi’s new gins launched just in time for Christmas. This range was not only great value, but remained localised, widely ranging and well marketed. Lidl adopting the same market reactiveness, saw a record sales increase of over 16% during Christmas. These companies understand how to pressure the Big Four, not just on value but by producing high quality, local produce that is tailored to what customers want. Traditional grocers will need to be prepared for these new 2018 battle lines.
From a new technology perspective, Christmas wasn’t all that interesting. We saw a continuation of the trends of cash and mobile payments with retailers remaining reluctant (wisely) to roll-out unproven tech.
Perhaps Christmas simply reinforced the idea that success comes from ensuring the brand stands for something and executes brilliantly. How novel!