The mini-budget last week seems to have had the opposite impact to what was hoped, spooking markets and making consumers even more circumspect about their spending, while contributing to growing retail turmoil.
Boohoo Group has posted a big swing from profit to loss for the half year compared to last year, while several studies among consumers show that most are now looking for bargains and are going to limit what they but at Christmas.
With more than a quarter of items for sale online currently being sold at a discount, they seem to be getting what they want – but it comes at a huge cost to retailers. A cost that may be hard to bear.
Couple this with news that the European retail trade body EuroCommerce has written to the EU to beg it to intervene in energy pricing and with a UK postal strike across Black Friday and Cyber Monday looking to come into force, and this isn’t shaping up to be a relaxing Christmas.
As the grim economic news continues, retailers are having to think of new ways to keep their business front and centre in ever-more cost-conscious consumers’ minds. And there are early signs of some of the ways in which this might play out.
Naturally, many are turning to technology to better optimise how they reach the right people at the right time. Sports brand ASICS, for example, is optimising its channels around mobile, looking to offer more targeted and personalised marketing on smartphones to drive sales across all its channels.
It is looking at customer journeys and assessing and removing pain points in a bid to make its ecommerce offering more suitable for a mobile audience, as well as future proofing the firm’s omni-channel strategy.
Similarly, FatFace is also looking at tech, this time to use user generated content (UGC) in social proof messaging. Here, it links real-world data on how reviewers are posting on social and appends it to reviews. So far it has led to a 1.71% increase in conversions.
The other area where retailers are looking to gain an edge is in delivery and fulfilment. DIY store Wickes has announced that it is cutting the wait time on all click and collect orders to just 30 minutes, so DIY-ers can order online and, if it’s in stock, head off to collect it right away. No more procrastinating about those little weekend DIY jobs now because you can’t get the parts.
Perhaps more interesting is the tie up between IKEA and Tesco to facilitate better click and collect for the former. These two non-competitive retailers have done a deal whereby IKEA can station click and collect pick up points in the car parks of selected Tesco stores, where IKEA shoppers can then conveniently collect their items.
I assume Tesco is hoping that there will be some spill-over trade in people also buying snacks and drinks to help see them through the tricky flatpack assembly that lies ahead, but for consumers it offers a huge increase in convenience. No longer do they have to go to one of the very limited number of IKEA stores to collect what they have bought online, rather they can probably find a Tesco that is much nearer.
This partnership between retail brands to facilitate convenience – especially around delivery and collection – is the start of a trend for more retailers trying to work co-operatively to make life easier for shoppers. For one partner there is the increase in sales from the convenience factor, for the other there is, as I say, the halo effect that may increase sales. For consumers it just makes life easier.
So, while the news from the wider world may be grim, perhaps out of adversity is coming a degree of cooperation and that ‘Dunkirk spirit’ of really all being in it together – unless you are in the top tax tier, or are likely to get a banker’s bonus.