Analysis

Mobile plays a key role in Christmas success for leading UK retailers

Key retailers, led by Marks & Spencer and  including Tesco, Primark and Debenhams, revealed better-than-expected trading results for the period ended 31 December to 7 of January 2017 – and much of this is down to using mobile to listen to customers.

According to Ray Gaul, VP Research & Analytics, Kantar Retail, Mobile shopping is changing the nature of shopping – and is growing rapidly. This has two great benefits for British retailing. For consumers it means that they can multi-task and pre-order; so they can order Christmas Turkey while taking kids to school for example. For retailers, they can communicate more directly with shoppers and get more immediate feedback – some of which can be comical/playful/viral.

“The retailers that performed strongly this Christmas have become incredibly well-focused on listening to customers,” says Gaul. “For example, Tesco is now conducting 7,000 shopper interviews per month. Additionally, Morrisons has been adding service desks and store greeters in their largest stores.”

The success of Britain’s largest retailers did not arrive without difficulty. Retail bosses had to make difficult investment decisions in a complex environment. Sterling’s decline since the Brexit referendum, the Living Wage and higher business rates posed strong challenges to retailers looking to invest in shops and staff. Generally, the retailers that traded strongly in the period went against classic convention by investing in staff, creating excitement, and taking time to speak with and listen to customers.

Tesco has invested in putting 12,000 staff back in shops on a full-time basis and added an additional 15,000 just for the festive period. Debenhams increased hours and even offered some staff made redundant when Bhs closed positions in similar roles.

Consumers are making bigger commitments to family celebrations – with both Easter and Christmas experiencing spending booms. However, this year retailers spent extravagantly on making the most of the promotional atmosphere that Black Friday, Christmas, and New Year can provide.

As a result festive party solutions are growing in double digits including Tesco Finest solutions, Morrisons The Best meal solutions, Sainsbury’s Taste the Difference limited time seasonal items. Improved quality at lower prices has been a main theme for all retailers.

For example Sainsbury’s has said that they were able to get a Christmas dinner priced at 14% less than two years ago while improving the quality of items in the Taste the Difference Party ranges.

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