Online and mobile clear winners in depressingly flat Christmas

The economy is looking up, unemployment is down but a combination of Black Friday being too successful and the weather made for a flat retail Christmas on the High Street, show the latest BRC-KPMG retail figures for December. However, online and, in particularly mobile, bucked the trend.

According to Helen Dickinson, Chief Executive, British Retail Consortium, “2015 drew to a disappointing close for retailers, with December seeing just 1 per cent sales growth, notwithstanding the strong underlying momentum of an improving consumer environment buoyed by rising real incomes, low inflation and low unemployment. Online performed strongly as consumers embraced the convenience and flexibility that more sophisticated retailers offered. “

While it’s too late to save Christmas, retailers need to learn some stark lessons from this year’s holiday season if they aren’t to fall flat over the coming year.

“It is clear that the 2015 peak trading period was a pivotal moment for online sales, with retailers such as John Lewis and House of Fraser seeing a surge in sales through digital channels – online sales accounted for 40% of John Lewis’ business and House of Fraser’s online sales rose by 61.8 % during the run up to Christmas versus a 2.2% increase for store sales,” says Iain Devine, Commercial Director at digital consultancy Salmon.

“Mobile and online shopping are no longer just part of the ‘multichannel’ mix but the focus of it,” he continues. “For retailers who saw online success over the period, this is a reflection of ensuring they were prepared with strong online operations for the influx and were ready to make the most of the opportunity. The most successful retailers are those that planned their online peak operations strategy, briefing relevant departments to ensure all online trading and operations teams could anticipate surges and were ready to react. For retailers to reap the rewards of their online channels, those who are seamlessly aligned from front-end to back-end, will be the ones to triumph in 2016 as mobile and online shopping continue to grow.”

The message that comes out of this is that retailers now need to work harder than ever to manage customers and that involves making best use of technology – both to market to them and to make in-store attractive.

The issue with the weather – a perennial problem in temperate UK climes that never seems to work in retailers’ favour – needs to also be tackled using technology, with IoT, online and mobile all having to be heavily drawn on to make stock management and logistics work better. There are also some good long range weather forecasting apps that many retail buyers should perhaps invest in.

But technology isn’t going to be the only answer: growth is still pretty flat even in the online branch of the industry. “Nevertheless, the boost from online was not enough to make this a Christmas to remember for most retailers,” warns BRC’s Dickinson. “The three month rolling total sales across all categories was the weakest for the entire year, with only 0.9 per cent growth, while non-food saw its slowest performance since January 2013.”