Each year, InternetRetailing focuses in-depth 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 higher volumes in the run up to Christmas, meaning that any changes in customer behaviour are seen more clearly.
Balancing Christmas delivery and discounting events
At this point in the run up to Christmas, many retailers are still promoting pre-Christmas delivery options, sometimes involving discounts and free delivery, while others are moving on to start post Christmas sales early online.
Currys, for example, is in the first group, promising on-time delivery for those ordering by December 22 – Thursday – following its shift away from the Royal Mail during strike action. On its website it is promoting same-day gift shopping, with collection from stores where items are available within an hour of ordering. There are home page offers but the emphasis is firmly on delivery. Marks & Spencer is also still focusing on delivering on time for Christmas, with offers on deliveries of flowers, as well as Christmas products. John Lewis is offering standard delivery to arrive before Christmas for those who order before 7pm on December 20 – and to free for those whose order is worth £50 or more – while also offering a range of discounts in categories from Christmas and womenswear to furniture and lighting. Amazon is also offering in-time for Christmas delivery, and is promoting a range of last minute deals on its own devices. Debenhams is offering discounts of up to 50%, alongside in-time for Christmas delivery options.
Meanwhile, Jigsaw’s winter sale is now on, offering discounts of up to 50%, and Very is running a ‘Very Big Sale’ while offering delivery in time for Christmas for standard delivery until December 21, and next-day click and collect via post offices and Collect+ network members. Its delivery information includes the information that where a product will be sent via Royal Mail it will add on extra time, flagging that up at the checkout. Boohoo has a ‘now or never’ sale offering at least 50% on thousands of lines, while also offering free next day delivery – and at sister retailer Coast the discounts are at up to 70% in its end of year sale.
All this taken into account, it’s not suprising that there have been recommendations, including from Bira – the British Independent Retailers’ Association – for shoppers to go in-store and buy instead for certainty. Ed Hill, SVP EMEA at Bazaarvoice, says that’s not surprising. “Home delivery is one of the main drivers for shopping online, but so too is the ease with which products and prices can be researched and compared,” says Hill. “Given that people now carry access to these online marketplaces everywhere they go, the line between online and offline shopping has become increasingly blurred as almost two-thirds of people research products online whilst physically in-store.
“As consumers head to the high-street in their droves, the online experience, access to reviews, photos and quality social media content will still be an essential part of their journey as they look to discover, research and compare items. By making it easy for shoppers to learn more about products, through whichever channel they prefer, brands and retailers will be much better positioned to close the sale at this competitive time of year.”
Train strike effects
While many retailers are warning about the effect of the Royal Mail strikes on at their online checkouts, it’s likely the train strikes – which are taking place today into tomorrow, and will also run from Christmas Eve to December 27 – are also having a real effect on in-store footfall, according to data from Place Informatics. The visitor behaviour data company has found that footfall on a month with a train strike is down by an average 19% compared to non-strike months. It found that London destinations were affected the most, with footfall reduced by 20.6% during a strike month followed by centres with main stations which saw a fall of 18.3% while commuter towns which saw a decline of 17.8% in visitor numbers. The most affected destinations were led by Mayfair (-19.6%), followed by Oxford Street (-18%) and White City (-15.1%).
Clive Hall, chief executive of Place Informatics, says: “Current trends are already showing us that the vital Christmas shopping period is tough for thousands of retailers, hospitality and other businesses this year and this new data showing the impact of train strikes on visitor numbers is concerning especially with further strikes planned in the coming weeks.
“We can already see how the cost-of-living crisis is starting to impact high streets and we expect further data will show the true impact on town centres as train strikes, rising bills and financial concerns reduce high street spending.”
How supply chain and the cost of living issues are affecting retail
Supply chain issues were a major hindrance during the Black Friday period as 42% of retailers saw slower footfall in-store and traffic to their website compared to last year, according to retail IT services provider NTT Data UK&I, which questioned 200 UK retail managers in new research.
According to ONS figures, retail sales were lower by volume over the Black Friday period and the new research from NTT DATA suggests that supply chain issues were a major factor. The research found that 46% of retailers found that supplier’s prices had increased this year, and that one in 10 could not sell specific items as they could not afford the stock. A further 40% could not get the stock because of shrotages, and 33% did not get stock delivered to their store in time to sell it.
Some 17% of retailers are now looking at reviewing their supply chain in order to save costs.
The study also suggests that retailers are being affected by the cost-of-living crisis in much the same way as their customers. Some 43% of retailers have had to increase their prices as a result of supply problems and the rising cost of living, while more than a quarter (26%) tried to offset the cost to the consumer by providing better offers to help people save more money this Black Friday.
It says retailers have been extending deals past Black Friday this year as well in a bid to increase sales, with 39% planning to extend deals up until Christmas and 38% extending deals to help support customers. However, says NTT, there is little optimism among retailers that this year’s dreary Golden Quarter will turn around, with 38% of retailers expecting lower sales this Boxing Day and post-Christmas.
Geoff Lloyd, director of retail at NTT Data UK&I, says: “Retailers have had a tough ride this winter, as the increased cost-of-living has restricted consumer spending and lower costs are now being favoured over convenience. Coupled with ongoing supply chain issues and it is no wonder that retailers have struggled over the Black Friday period.
“This demonstrates the need for improved resilience in the retail supply chain, and technology has a huge role to play here in supporting retailers. By implementing the right digital systems to automate processes, retailers can monitor their supply chain more effectively and adapt when suppliers are unable to deliver.”