Winning at Christmas 2019
Uncertainty and changing consumer attitudes
2018 was a turbulent year for many UK retailers. High street names such as Debenhams, House of Fraser, New Look and Mothercare were in trouble. Others like Maplin and Toys R Us disappeared completely. Brexit continues to breed uncertainty and consumer confidence continued to decline as the golden quarter approached.
Barclaycard data shows that shoppers continued to prioritize spend after the summer on non-gifting categories. Activities and experiences that bring friends and family closer together win over spend from ‘buying stuff’ early in the season before shoppers eventually got into the swing of Christmas shopping.
Martin Lewis urged us all to not buy those ‘unnecessary gifts’ and to be selective about the gifts we do spend our hard earned money on. Savvy shopping prevailed. In our own report, The Seven Deadly Sins of Christmas, one in four 18-34 year old shoppers were already claiming to hit ‘the sales’ in the week before Christmas.
As a result, footfall suffered across the season. We’d hoped online traffic would have made up the shortfall, but it wasn’t enough to close the gap. Even though 8 in 10 of our 500 UK shoppers claimed to have bought gifts online this year.
Retailers buckled under the pressure
Black Friday came and went with another week of offers. Retailers fought back with discounts to lure shoppers in. Sales were earlier, bigger and better than ever before.
This makes sense to appeal to this new breed of mainstream savvy shoppers, right?
For us at Trinity McQueen, it also has a troubling side effect. Retailers have primed shoppers to shop later as they expect deep discounts and January sales to start earlier. Particularly in categories such as fashion and electricals.
There is no urgency, excitement or enthusiasm to shop across the season.
This approach has dampened shoppers’ attitude towards seasonal sales. Many were as sceptical (15%) as they were enthusiastic (14%) about seasonal sales in 2018.
Savvy to fight for sales at Christmas 2019
For retailers who rely heavily on the ‘golden quarter’ for sales and profit is isn’t as clear cut as it used to be.
Retailers needs to be savvy in return.
When looking to give shoppers real value we can look to the principles of behavioral science for guidance. Across the season there will be times when retailers and brands are under pressure for sales to perform. We urge you to stick to behavioral science principles to hold your nerve, and don’t buckle under the pressure to go into sale or deep discounts.
If as a brand or a retailer you whole heartedly believe in your brand and seasonal proposition with a clear point of difference you stand a better chance of cutting through the noise and shoppers will notice. Lush and Body Shop are good examples from the 2018 season.
Execute your strategy to clearly communicate your proposition to shoppers across everything from range to value to how easy it is to shop with you. Hold your nerve.
If you have any doubts about what your offer will be for shoppers for Christmas 2019 we urge you to review this as soon as possible. If you are unclear of what you stand for, what your range gives shoppers or what your value proposition is, it will get lost in the wider noise of the Christmas season.
If you have to offer early discounts, then ensure you can anchor discounts in an RRP that shoppers can truly believe.
2019 is going to be a tough Christmas season for retailers. Be flexible to adapt, change, listen to shoppers and ensure your proposition is watertight. Don’t simply rely on deep discounting as this approach alone will only go so far.
The market will continue to change. January sales may be a thing of the past. It’s going to be one hell of a ride, buckle up and get that proposition nailed.
Trinity McQueen, The Seven Deadly Sins of Christmas: https://www.trinitymcqueen.com/seven-deadly-sins-of-christmas
GfK Consumer Confidence index https://www.gfk.com/en-gb/insights/press-release/uk-consumer-confidence-drops-one-point-in-december-to-14/
Barclaycard spend data: https://www.home.barclaycard/insights/consumer-spending-reports.html
Springboard footfall data: https://www.retailgazette.co.uk/blog/2018/12/footfall-plummets-black-friday-springboard-data/