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PEAK 2022 How shoppers are buying on the approach to Christmas

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Each year, InternetRetailing has an in-depth focus on the peak trading period. In part, that’s because it is the most important time of the financial year for many UK retailers. It’s also because shopping takes place at a higher rate in the run up to Christmas, meaning that any changes in customer behaviour are seen sooner and more clearly. 

As we move on from Cyber Week, we’re looking back to how shoppers bought over the Black Friday period and ahead to what comes next.

Amazon enjoys record-breaking Cyber Weekend

Amazon says the Black Friday weekend was a record breaking one for it, with shoppers buying hundreds of millions of products over the weekend. “This was a record-breaking holiday shopping weekend for Amazon,” says Doug Herrington, CEO of Amazon Stores. “Customers shopped millions of deals this weekend and we have many more amazing deals to come. Thank you to our customers for choosing to shop on Amazon, and to our employees and selling partners around the world who are delivering for customers every day.”

Amazon says its best-selling categories were home, fashion, toys, beauty and Amazon devices, while shoppers spent more than $1bn in sales with US small businesses.

Commenting, Andrew Busby, retail industry lead at Software AG, says: “Despite household budgets being squeezed, the lure of a bargain was too great for many given the economic headwinds affecting the majority. The feel-good factor of making a saving while spreading the cost of Christmas over a longer period of time has resulted in record sales volumes for Amazon this Black Friday, and I imagine we’ll see other retailers follow suit with similar announcements. However, return rates will likely be higher than ever after the affordability realisation sets in, meaning the uptick in sales might be short-lived.”

Nobody’s Child sees strong Black Friday growth

Nobody’s Child saw strong growth on Black Friday. The fashion brand says gross revenue grew by 151% during the course of the day, compared to Black Friday last year. Just over half (51%) of sales were after 6pm. Its top-selling product for the day was the Fearne Cotton Piper Cord Pinny, developed through a collaboration with Happy Place.

Revenue via paid search channels such as PPC and Google Shopping rose by 341% on last year, while email revenues were 155% ahead. Across the site, average over values rose by 4%.

Black Friday sales down on last year – but up across Black Friday week: IMRG

Email trade association IMRG tracks online sales across more than 300 retailers and says that sales on Black Friday were 5.5% lower than last year. However, sales across the Black Friday week were slightly up (+0.3%) – and beating IMRG’s forecast of a 5% year-on-year fall. That, says Andy Mulcahy, strategy and insight director at IMRG, is “not too bad”. Speaking on this week’s IMRG webinar, he said: “Because November was the most sustained, close-to-positive territory that we have seen so far this year, it goes make you wonder a bit about December. We have lived through quite a period of not flying. But it was better than we were expecting and more sustained than we might have expected.”

In particular, health and beauty sales were “better than expected” and home and garden sales were “not too bad either”.

Speaking on the webinar, Heather Wight of tax specialist Avalara, said clients had seen good international sales, for example to the US and Australia.

The World Cup effect

Shoppers bought during the England USA World Cup match on Friday, spurring speculation that the football had less impact than feared on UK Black Friday sales. Ecommerce experts at Zendbox compared internal sales figures across a variety of the UK’s leading brands against last year’s turnout to determine how shopping habits have changed over the last twelve months.

The research suggests that whilst the amount of orders continued to grow from October to November, in line with the Black Friday sales, this slowed to a 71% increase compared to last year’s figure of 118%. Zendbox says this indicates that despite consumers continuing to show an interest in the potential bargains on offer, the overall uptake has noticeably decreased.

And it says that although there appeared to be an initial correlation between the World Cup match and Black Friday profits, with sales plummeting during the first half of the match, this all changed throughout the second half. With England and the USA remaining at a disappointing 0-0, fans clearly started to switch off from the uneventful match, as sales figures started to pick up in volume once more. 

“Surprisingly, the FIFA World Cup ultimately had little impact on shopper turnout this year,” says Gilson Pereira, head of marketing at Zendbox. “It seems that due to an underwhelming game, even the nation’s most-loved sporting event couldn’t keep us away from securing a bargain on our favourite products, particularly ahead of gifting season.”

Pereira says that the slowing in growth can be attributed to the early launches of UK promotions, spreading sales through the month in the hope of gaining a share of customers’ wallets.

“With the cost-of-living crisis at the forefront of the nation’s mind, it’s been interesting to see how this has impacted shopping habits over Black Friday,” says Pereira. “On one hand, we predicted that Brits may be looking for the best bargains to save in the long run, but another theory was that many may be trying to avoid spending at all costs given the current climate. The results indicate that although Brits haven’t been entirely disenchanted by the Black Friday sales, the latter is a more accurate description.”

“Black Friday is the perfect opportunity to cut costs on otherwise expensive purchases and in the face of tightening budgets, the data clearly shows that some Brits are continuing to make the most of the enticing deals that the retail event has to offer. Even so, an increasing number of people are being much more mindful of how and where they spend their hard-earned money this year, and those who may previously have been tempted by the prospect of a Black Friday deal are now prioritising essential purchases, or saving their cash in time for Christmas.”

More mobile apps downloaded

Data from mobile app experience specialist Airship suggests the number of mobile app downloads increased by 13% ahead of this year Black Friday, in comparison to last year. Cyber Monday also prompted more shoppers to download mobile apps than in 2021, with an increase of 25%.

Graphic: Airship

Overall, Airship witnessed 1,560,390 more mobile apps downloads, on its platform, between Black Friday and Cyber Monday than last year – a year on year increase of 21%. This data is based on over 100 Airship customers with shopping apps of over 100k mobile app users.

Marketplace payments up on Cyber Monday

Marketplace payments specialist Mangopay says UK marketplace sales improved over the course of the cyber weekend.

Luke Trayfoot, CRO, Mangopay, says: “While Black Friday saw an uptick in ecommerce sales generally, Cyber Monday 2022 was when marketplaces took centre stage. In the UK, online marketplace sales were 43% higher than the first Monday in October. This is good news for online retailers, as it demonstrates that even in an economic downturn, with consumers becoming more spending conscious, retail events can still generate additional sales and revenue. Our data also shows that savvy British shoppers are prioritising bagging bargains above their usual Monday morning duties. While most Cyber Monday shopping across Europe took place between 7-9pm, Brits couldn’t wait, with purchases peaking at 11am.”

“Data demonstrating customer preferences like this is invaluable to online retailers using marketplaces to reach a larger audience, so they can be ready to capture even more sales on ecommerce events in 2023.”

Falling footfall

The number of people visiting UK shops declined in November, according to BRC-Sensormatic IQ data. It found that total UK footfall fell by 13.3% in November compared to pre-pandemic 2019. That’s 1.5 percentage points worse than October, suggesting a month-on-month decline. Footfall on high streets was two percentage points (pp) down on October (-13.6% on November 2019), while retail park footfall was 0.5pp down, and 4.2% lower than in November 2019. Shopping centre footfall was 23.2% lower in November than in 2019, and 1.4pp lower than October 2022.

British Retail Consortium (BRC) chief executive Helen Dickinson says: “Footfall took another stumble as the cost of living crisis put off some consumers from visiting the shops in November. Others opted to stay home due to the scattering of rail strikes, or chose the World Cup over shopping visits. Many big cities were particularly hard hit, with Birmingham, Bristol and Manchester all seeing the biggest drops in footfall since January.

“Rising inflation and low consumer confidence continue to dampen spending expectations in the run up to Christmas. Despite retailers doing their best to keep prices as low as possible for their customers, financial concerns are trumping spending for many households. But, with three more weeks to Christmas, retailers hope that the festive spirit may still give a welcome boost to both footfall and retail sales.”

Meanwhile, figures from Springboard suggested that November footfall was 11.1% down on November 2019, but 4.3% up on last year, with high streets (+5.6%), shopping centres (+5%) and retail parks (+0.7%) all showing a measure of growth on last year. Diane Wehrle, marketing and insights director at Springboard, says: “It is clear that footfall in many smaller malls has been adversely impacted by store closures, some of which will have commenced pre-Covid as retailers began rationalising their store networks, which was then heightened during the Covid period when stores closed and did not reopen when all restrictions were lifted. This is further exacerbated by the response of some landlords to the lacklustre performance of smaller centres, which has led to them cutting back on investment. In contrast, in the face of hybrid working which has suppressed the recovery of footfall, many high streets have invested heavily in marketing and transforming themselves seasonally.

“Post Black Friday we are likely to see a lull in footfall over the forthcoming weeks, which is a pattern of activity recorded by Springboard post Black Friday in pre-Covid years. There is a six day trading week in the lead up to Christmas Day this year, which suggests that footfall in the week prior to Christmas (from Sun 11th December) will also be muted, as shoppers may well hold out for the last week beginning Sunday 18th December to shop in the hope of benefitting from last minute discounts.”

Shoppers planning to use vouchers to buy this Christmas

John Lewis estimates that 20m UK shoppers are planning to use £1bn in shopping vouchers to buy this Christmas. 

John Lewis Finance commissioned research questioning 2,000 UK adults and found that while 70% are planning to get together with friends and family over the holidays, 45% will be mindful of how much they spent, and 61% have set a budget.

The majority (83%) of households, it found, have saved up vouchers specifically for Christmas shopping, and 36% will make more use of them this year than last. On average shoppers have £57 in vouchers saved up – equating to £1bn across the UK. Six in 10 (59%) say they will use them to treat family, 36% to treat friends and 43% to treat themselves. 

Jason Morrey, head of John Lewis Partnership Credit Card, said: “With household costs rising, shoppers are wisely looking for ways to ensure they can have a great Christmas and treat themselves and their loved ones, without breaking the bank. Saving up vouchers is a great way to do this.”

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