With energy prices set to rise in April when the price cap is removed, retailers should be wary that there could well spending storm clouds on the horizon just as Spring gets going.
With the prices caps removed, shoppers will have less funds. At the same time, retailers will have bigger bills – both running their own operations and in price rises past on from their suppliers. It could be a double whammy.
With shoppers spending less on Valentine’s Day this year than previous years, instead saving their money for more important things like their pets, shows just how tight things are. Christmas spending was higher than predicted, but this surge tailed off across January and February was slow to pick up. Retailers aren’t out of the woods yet.
However, one thing that the past few months and years have taught us is that many retailers are quite resilient and adaptive in times of stress.
Simple things like improved credit checking can streamline sales and squeeze more revenue out of customers. London Camera Exchange has done just that, looking at how to improve the credit process so that it is smooth and slick means that, once a customer is lined up to buy, there is one less impediment to their conversion.
Likewise, re-commerce fashion brand RESPONSIBLE has addressed issues with its overseas returns process – making it work in a post-Brexit world – to make what it offers even more attractive.
The idea that returns and refunds can actually aid sales seems counter intuitive, but it makes sense. As with smooth credit checking, having confidence that you can return goods if you don’t like them also makes you more inclined to buy.
The same applies to the ability to get refunds. In fact, research shows that retailers that have a reputation for being slow to make refunds on returned goods are seeing shoppers spend less. Shoppers are now so cost-conscious that knowing that they may not get their money back quickly could make or break them and so they don’t take the chance – in turn meaning lower spending.