Studies out this week suggest that retail will grow slowly over peak trading 2019, while also offering insights as to where, when and how shoppers like to buy
Total retail sales are set to grow by just 1% in the golden quarter of 2019, but online sales should outpace that growth, suggests data and analytics business GlobalData. If this came about – following on from a year in which sales grew by 1.3% – its UK retail research director Patrick O’Brien says it would produce the worst Christmas retail result since 2011.
“However,” adds O’Brien, “there is hope that the outcome of the election will give a decisive result, which could at least unlock purses and wallets in the last two weekends before Christmas. Another hung parliament pointing to further elections, another referendum or a continued Brexit stalemate, could see that last-minute, present-buying rush turn into more of a wake for retailers.
“Online retail will continue to grow much faster than the overall market, though discounting will be rife during the period. Black Friday offers will once again start well before the main day with promotions continuing from this point up until Christmas with sales launching earlier than ever as retailers grapple for a slice of shopper spend, despite taking a hit on margins.”
He predicts that clothing and footwear retailers will be under particular pressure to deliver discounts – though, he says, this will be “a tough ask given the rife promotional activity so far this year, with shoppers becoming immune to discounts.” Discounting is also predicted in department stores and in the health and beauty sector. Premium brands, meanwhile, “will focus on selling directly to consumers via their online platforms, social media and flagship stores, with seasonal exclusives, gift wrapping services and free gifts with purchases attracting brand-loyal shoppers.” Electricals retailers are predicted to see their lowest fourth quarter growth since 2016, highlighting “the big impact that low consumer confidence has had on big ticket purchases.
Shoppers could start their hunt for Black Friday bargains as soon as tomorrow, says eBay Advertising. It says consumers actively search for deals as long as nine days before the event, and last year, it saw searches for ‘Black Friday’ rise by 73% overnight on Wednesday November 14 – a week and a half early. This year, the equivalent Wednesday falls tomorrow.
eBay says last year also saw sales rise across categories on Black Friday itself, with purchases up by 36% on Black Friday itself, compared to the same day the previous week. The sporting goods category saw sales rise by 27%. Meanwhile, searches for ‘beds’ (+19% overnight on Black Friday compared to the day before) and ‘mattresses’ (+28%) were also up, as were searches for ‘Apple Watches’ (+22%) and Fitbits (+23%).
Mike Klinkhammer, director of advertising sales EU at eBay, said: “With Black Friday falling so close to both payday and Christmas this year, shoppers will be out in full force as they look to snag big-ticket items at small prices. And we’re seeing sales spread across more verticals than ever before, meaning consumers can bag a bargain for everything from sofas to sports equipment. But our data shows that consumers are looking for ideas and inspiration long before the day itself – and that presents an exciting opportunity for advertisers. By engaging with their target audiences well in advance, brands can ensure they are front of mind when the money starts to flow.”
Jon Reily, head of global commerce strategy at digital consultancy Publicis Sapient, predicts discounting will increase as Black Friday gets longer. He said: “As economic worries begin to mount consumers will be seeking more ways to save money this holiday season over the last few years. This will drive the big retailers to offer more and more price cuts for their Black Friday and Cyber Monday events, and expect to see a lot of fanfare around these sales.
“Typically the holiday season kicked off on Black Friday, but retailers always looking for ways to undercut their competitors are pushing the holiday deals earlier and earlier. With a late Thanksgiving this year, expect to see the sales launch weeks earlier as there are six fewer days in the 2019 season. Amazon’s Prime Day is expected to have taken a bite out of the holiday this year, but it remains to be seen how much, and if shoppers can exhibit self-control when it comes to the buying frenzy.
“2019 will be the first year that more people will shop for the holidays digitally versus in store, which is great news for the online powerhouses of Amazon, Walmart, and Target, but less so for the mall stores which will continue to see reduced footfall this holiday. However, even though purchases are predicted to be more clicks than bricks, that doesn’t mean that people won’t go to stores. More than 90% of shoppers polled recently say that they will do at least some shopping at a physical store, so it’s up to those retailers to get that sale while they are there versus losing it in the parking lot to the customer’s smartphone.”
Almost three-quarters (74%) of UK consumers say they won’t visit the high street to look for Black Friday offers while more than half say they never shop in-store during the event. When they were asked why, 30% said stores were too crowded, while 27% prefer to buy online because it’s easier, according to a study carried out by customer experience and contact centre solution specialist Genesys.
“During this heightened shopping season, consumers not only look for the best possible deals, but increasingly base their purchasing decisions on how well businesses respond to issues, such as making returns and requesting technical support,” said Mark Armstrong, vice president for UK and Ireland at Genesys.
“Therefore, it is important that regardless of the sales channel, whether in-store or online, brands provide positive experiences and have the means to effectively communicate with customers to solve queries or complaints.”
Some 45% of employees say they use work time to get their online shopping done. Half of shoppers say they check their personal email accounts during the working day to look for marketing messages, while 73% say they like to receive email reminders that contracts or subscriptions are coming to an end, according to a study from marketing technology company Pure360. Meanwhile, 63% of consumers want the option of receiving a notification that an out-of-stock item is available again.
Komal Helyer, VP marketing at Pure360, said: “Consumers are already engaging with and buying from brands during the working day – this is only set to increase in the run up to Black Friday and Christmas when consumers will want to get in on the best deals and get organised with their festive gift-giving. For brands, it will become more important than ever to understand shoppers, what is useful to them and what’s going to put them off during this crucial period.”
“Emails that provide helpful information - demonstrating that the needs of the customer are understood - are likely to get increased engagement. For example, leveraging customer insights from purchase history, real-time behaviour and purchase intent can lead to the creation of content that offers customers exactly the right recommendations and information they need at the right moment.”
There now appears to be less likelihood of a pre-Christmas postal strike following the Royal Mail’s success in winning an injunction from the high court against the CWU. The Royal Mail argued that the CWU’s ballot was unlawful. However, a similar ballot result at Parcelforce Worldwide - which delivers larger parcels – was not affected by the decision.