Offer deep enough discounts and shoppers will buy. That seems to be the overriding message from the various retail sales reports out this week. The ONS report says that a record proportion of sales took place online in November, while in our Week in Peak report we look at how shoppers are being tempted online by ever-deeper discounts, and how that’s set to continue over Christmas.
And as we head into the Christmas break, we’re expecting sales to peak again over Christmas and Boxing Day when shoppers spend what money they have left on snapping up still more discounted goods. But while all this discounting may be working to shift stock, it must be coming at a sharp hit to profitability that we won’t see until next year. That hit will come amid Brexit worries: retail and logistics reaction to this week’s white paper on immigration suggests that the industry could soon find itself even more short of staff, while we’re still waiting to find out on what footing the UK will choose to leave the EU.
Online discounting works to boost sales because it’s now so easy to buy online, and as a result shoppers aren’t venturing into stores quite as much as they did – although, as online shopping hits record levels it’s important to remember that almost 80% of retail sales are still taking place in stores. Nonetheless, Sir John Timpson, who chaired the High Streets Expert Panel for the government, says in this week’s High Street Report that the UK has too many shops in an age when online shopping is growing fast, and some of those could well be converted into housing.
The Institute of Customer Service also has a view here: it says that shoppers still want to buy from department stores on the high street, even as online shopping takes off, but that in-store service must improve.
Taking all of this evidence together, we could reasonably conclude that shoppers want to buy some of their retail purchases online for discounts and convenience. But most of the time, they still head in-store. But they’ll only visit, by choice, the stores that give them the experiences and the service that they want to receive. This all goes back to the importance of offering omnichannel retailing that works for shoppers, whether they want to buy in-store, online, or collect or return their digital purchases in stores.
In today’s guest comment, Ben Stagg of Barclaycard takes a timely look at how retailers are responding to the high street crisis.
The InternetRetailing newsletter now takes a break over Christmas and New Year but we’ll be back in the first week of January with mobile and general omnichannel updates, including our seasonal series of predictions for 2019. Check back in for our take on what’s going to matter most for ecommerce and multichannel retailers in the New Year. Until then, we wish you a Happy Christmas and a Merry New Year.