While the idea of Blue Monday, the third Monday in January, sufficiently distanced from Christmas cheer in one direction and payday in the other, may have been created to shill holidays, there is some truth in it. I for one felt a distinct grimness as I got up in the cold and the dark to start yet another week. However, it may not have been so bad for retailers.
According to data, online sales went up 18% compared to the previous Monday, driven it is speculated, by retail therapy: shoppers turning to buying themselves a treat or two to help them over this depressing hump.
This mini spike in sales couldn’t have come at a better time. Footfall and online retail figures also out this week only add to the Blue Monday woe. Online shopping is still drifting back down post-pandemic as the ‘old ways’ start to fade, yet while there is a slow but steady return to physical retail locations, that return is nowhere near back to the levels seen in 2019.
Figures show that from May to December 2022, high street footfall slowly rose 10.2% compared to 2021. However, it is still down 14.2% on 2019 levels.
The culprit seems to be that more people than ever are hybrid and home working, so weekday footfall is low as there are simply fewer people about. At the weekend they are heading to retail parks, which by December 2022 were just 3.7% behind where they were in 2019.
The cost-of-living crisis is also impacting retail overall, with not only fewer people heading to high streets, but actually spending less when they are there. This reluctance is also harming online sales too.
However, there are other factors at play. There is an emerging disconnect between consumer demands on retailers and what retailers are prepared – or, more accurately, can afford – to give them. A study out this week finds that consumers want more product details and more sustainability from retailers, along with the ability to try out and explore retail in the metaverse. Naturally, many retailers baulk at trying to make this happen. While they can probably amend the first one, developing a wide ranging sustainability strategy is a lengthy – and costly – process. As for ‘creating metaverse experiences’ for consumers to see if they like it, that has ‘white elephant’ written all over it. Build it and they may come, they may then not like it and then they will leave, to paraphrase the old cliché.
The sheer cost of trying to meet these consumer drivers is starting to make life difficult. Sure, retailers need to meet the demands of their customers, but these demands have no guarantee of a return on investment. So what to do?
The problem is exacerbated for large, established retailers but the fact the a number of smaller, niche players are already meeting these needs. Only this week two small fashion companies – Lucy & Yak and Sweden’s PO.P – have revealed plans to buy back their own brand clothes from users and resell them, creating a perfectly circular economy model.
Both have the advantage that they have built their businesses on sustainable models, gathered a clientele who shops with them for that reason, and so has little trouble evolving to this new circular process. Each also is small and agile and can afford to roll out this buy back model across a relatively select customer base. Imagine trying to do this across, say, the whole of a multinational clothes retailer? The scale is so high that it will take months, if not years, to develop, as well as possible not being economically viable.
Instead, I suspect that many retailers will retrench to core selling, with some lip-service to these other consumer forces, and that it won’t be until the economy truly picks up that we shall see some true innovation in sustainability and the metaverse.
That may be depressing reading on the Thursday of the week that started with Blue Monday, but when this surge in innovation does arrive, it will be something quite transformative of the retail experience we have today. Don’t be glum, be patient.