PEAK 2017 The official December verdict from the ONS

Online sales were particularly strong in December for retailers operating in the textile, clothing and footwear categories (+20.9%) and household goods stores (+17%) in December, according to the ONS. Overall, ecommerce sales grew by 9.4% and accounted for 18% of all retail, slightly more than the 17% share that online took in November 2017.

Business was less buoyant at department stores (ecommerce sales: +11.1%), while online food sales rose by 12% to account for 5.5% of overall retail sales in the sector.

Overall retail sales excluding fuel, meanwhile, rose by 4.4% in value in December, buying 1.4% more goods compared to the previous year. But shoppers spent less in December than they did in November, with sales down by 0.9% on the previous month in value – buying 1.5% fewer goods.

Commenting, Rupal Karia, managing director, commercial sector at Fujitsu UK and Ireland, said: “It is fair to say that retailers have a tough market to navigate. High-street figures are at their worst in five years, and it’s clear consumers are wary of spending their money as inflation exceeds UK average wage growth, causing prices to increase and purse strings to tighten. Consumer spending habits aren’t what they once were and retailers cannot rely on what worked before or their heritage to get shoppers through the door anymore and part with their money.

“It isn’t all bad though, and we did see some success from retailers over the Christmas period. Interestingly, the retailers that did well had a strong multichannel offering as their differentiator for success. We have found that consumers want and will shop with brands that offer a better technology experience in store. What’s more, three quarters go as far as saying that if Amazon had a physical store, it would become their preferred place to shop.”

Craig Smith, VP of customer success at Amplience [IRDX VAMP] said: “After an already challenging year, many retailers must feel like they’ve woken up to a belated lump of coal in their Christmas stocking. Disappointing December trading figures only compound the reality that retailers aren’t doing enough to engage customers. In this uncertain economic and political climate, deep discounts and speedy deliveries may no longer be enough for retailers to survive.

“The retail engagement challenge will only increase throughout 2018. After a disappointing Christmas often comes a slew of New Year profit warnings. Increasingly, the sector is becoming a two-speed affair. It is now split between retailers unable to keep up with their customer’s demands and those able to adapt and capitalise quickly on the latest trends.

“The customer experience has changed beyond all recognition, becoming more mobile-centric and social-media focused than ever before. In order to succeed in today’s world, retailers must deliver targeted, enticing content that is optimised for mobile. Retailers who have failed to realise this don’t have much time left!”

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