Christmas is a competitive time for most major retailers and independent business alike, creating the need to ensure that advertising efforts and marketing plans are tailored to stand out from the crowd and shine like the North Star. Every year there are those who excel and land themselves well and truly on the ‘good list’, and then there are those turkeys who should have spent a little longer in the oven.

 

‘Tis the selling season

The festive season should be on every retailer’s radar well ahead of the cold weather drawing in, allowing at least three months to effectively plan how they will negotiate what is typically the most profitable time of the year. Many retailers make over half of their total sales for the year during the holiday period, so brand activations, highly targeted marketing campaigns and online experiences should all be solidified in iron clad strategies before the clocks go back (if you’re in the UK that is).

Although exciting and engaging events are excellent for achieving press coverage and generating buzz, retailers need to think beyond the glitter and gold to decipher how to drive conversions. Considering the entirety of the customer journey will form the basis of encouraging customers to purchase, utilising data and demographics to develop content and communications which endeavour to strike the right balance of selling channels and are consistent in their approach and messaging.

 

Who made the nice list?

‘The golden quarter’ was a tale of two halves for the retail industry last year, with stark contrast across the board. The period boasted above-forecast sales growth for many, but for others, disappointing sales and profit warnings were weighing heavily come New Year’s Eve. From premium own-brand labels to discounts and understanding the importance of convenience, the festive period in 2017 presented some clear lessons to be learned ahead of Christmas 2018.

For supermarkets giants including Tesco and Morrisons, alongside German budget rival chains Lidl and Aldi, 2017 was the year of investment into own-label brands. The move to incorporate more luxury items into own brand offerings has seen customers choose to ‘trade-up’ while still able to complete their regular shop, without moving to more expensive options such as Waitrose. Providing the capability to find luxury quality items during the customers shopping experience proves to have the capability to incite impulse purchasing, while also offering the opportunity to purchase more specialised food items during the seasonal period – often at a reduced cost. Aldi came out as the true Christmas champions, posting a 15% rise in sales during December, which propelled their annual revenue in the UK and Ireland over the £10bn mark, for the first time.

Black Friday has offered a welcome respite and recovery for retailers who historically saw relatively disappointing sales during the October period. Taking inspiration from our American cousins, online and high street retailers alike, now take part in the post-Thanksgiving discounts which sees more than 50% of UK shoppers planning on making purchases during the event. Black Friday 2017 saw UK online retail sales up by 11.7% to £1.39bn, well ahead of the 9% forecast growth for the day.

November retail sales have leapt up in value by 4.7% (Office of National Statistics), year-on-year, thanks to the US-born discount day which has quickly evolved into Cyber Monday and often almost a fortnight of discounts, sales and offers, both before and after the date.

One of the key takeaways from the success of the event last year is the increase in how retailers hopped on the date to tailor ‘exclusive’ and time-sensitive pricing to drive their discounting campaigns. Advertising activity began well ahead of the event, with some starting around a week earlier to promote both Black Friday specific offers alongside a multitude of other non-specific deals which seemingly worked in tangent to generate interest and conversions.

Christmas 2017 saw customers more willing to cough up the cash on festive food, with a 2.6% growth in sales during the three month period, instead, spending time and less money searching for bargains when it came to the likes of clothing and gifts. Budget brands such as online giant, Boohoo saw sales up by 100% in the final quarter, which propelled it to the position of top trader on the Retail Week Christmas league table.

Unfortunately, footfall dwindled with fewer people willing to face the cold embrace of the high street, which resulted in a relatively bleak start for department stores such as M&S and House of Fraser, with Debenhams and Mothercare facing profit warnings as a result.

 

Omnichannel seasonal success

With the state of the high street uncertain, it now falls to more succinct omnichannel strategies to ensure that retailers can pick up the pieces or risk losing out. Over December 2017, the British Retail Consortium reported a reduction in footfall by 3.5%, noted as the most significant decline in almost five years (March 2013).

The changes reflect the current economy and a decline in disposable income but also a preference towards ecommerce, which is overall more accessible and more manageable than navigating the high street. Customers also associate shopping online with an improved capability for savings due to more browsing time and the ability to search for discount codes and offers easily. Due to mounting economic uncertainty, consumer confidence is fragile, and by shopping online, rather than in store, they are better able to carefully control spending and find the best deal for their money.

Across the market, retailers have seen a rise in online sales by an average of 8%, with many carefully managing their presence in online spaces and improving customer service by increasing time limits on next day delivery, reducing costs for speedy dispatch and providing solutions such as click and collect in order to cater to a wider audience.

Stellar quality customer service is non-negotiable, regardless of if the brand is budget, luxury or anywhere in between. Customers expect retailers to solve a problem they have and whether they have planned ahead or waited until the last minute, companies must be able to flex to cater to their every whim in order to secure a sale. Equipping themselves with the right information and tools to carefully monitor what their customers are doing and saying will allow retailers to be more reactive when it comes to managing the customer purchasing cycle.

Moreover, brands must ensure they are regularly engaging with customers to build a long-term relationship utilising a range of channels to do so. All channels should be aligned with one unified vision that will build familiarity and ensure that the consumer can find familiarity – regardless of where they come into contact with the brand. Above all else, these interactions and messaging should anticipate a customer need ahead of it even occurring, in order to effectively build an associated value and trust in the brand.

Significant heavyweights in the industry, including John Lewis, hail the omnichannel approach as the key for such success during the holidays. The combination of channels drives sales, allowing people to browse online, place orders on mobile phones or tablets and collect in store.

In order to really get ahead of the competition this Christmas, retailers need to focus on providing the best experience for the customer, which works around their lifestyle and can offer price, service, quality or value. Brands need to collect insights which allow for a deep understanding of the consumer. Without customer data influencing an ecommerce omnichannel strategy, brands will struggle to make it onto their customers Christmas lists this year.

So how do you sleigh the competition with a cracking Christmas retail campaign?

  • With non-negotiable stellar quality customer service
  • With tailored ‘exclusive’ and time-sensitive pricing
  • Encourage your customers to ‘trade up’ via appropriate cross-sells and upsells (e.g. incorporating luxury items into own brand range) to maintain margins.
  • Use technology and data insights to deliver a tailored shopping experience across digital and offline channels
  • Plan Christmas and Black Friday campaigns early to maximise the opportunity
  • Ensure digital and offline channels have appropriate scale and capacity to support the peak in demand

Barry Thorn is the Business Director at Redbox Digital, responsible for commercial strategy and development. He has worked in ecommerce for more than 15 years, having previously run the retail go-to-market for KPMG’s MSFT Dynamics and Magento practices. His focus in on the transformative impact of digital, eCommerce, cloud, ERP and CRM technologies, and supporting retailers with their digital and omnichannel ambitions. To get in touch and start a conversation, feel free to email [email protected]