How retailers can maximise sales in a Golden Quarter like no other
From a retail point of view, whether we are ready or not, September means all eyes start looking towards Black Friday and the Christmas Peak period. The importance of this period can’t be underestimated, particularly in 2021 on the back of shops being shut for such long periods during the various lockdowns. Finally we return to a more “normal” period of retail behaviour and holiday festivities with some strong indications the bounce back could be like no other. Let’s explore what some of the forecasts are predicting and how the season is expected to play out this time.
Consumer confidence has been consistently rising through this year and should be closing in on positive territory as we get to the golden quarter. GfK’s trusted Consumer Confidence Index is already up to -8 from the latest August reading, putting it ahead of pre-pandemic levels, and barring any serious economic or public health issues it should keep its momentum.
Absence makes the wallet grow stronger
Within this, there have been big jumps in major purchase indexes too, with shoppers seemingly ready to spend on the right products at any price point. UK consumers are estimated to have saved around £200bn in the various lockdowns, while 54% of those savers are ready to spend it on Black Friday and Christmas according to a recent survey by Future plc.
A big draw for spending that money for most people this year will be the fact that we all missed out in many ways last year. Whether it be seeing more loved ones, a family holiday or a trip to an atmospheric high street to do the Christmas shopping. Those returning will be expecting a positive experience from brands and retailers, and it will be important to consider both shoppers that are part of this group, along with those that remain cautious with the virus still circulating.
Whichever way people behave, it looks like certain patterns are going to come to the fore. Home improvements, fashion, health & beauty, and toys of course are all set to be categories of real growth this season. Although there could be a whole series of sectors that could benefit when it comes to potential sales growth due to pent up demand.
All of this confidence is pointing to optimism for the festive period when it comes to sales forecasts for 2021. Although a slight drop is predicted in total retail terms due to less food sales this year, Retail Week research predicts a 0.5% increase in non-food sales vs Q4 2020, and a 1.7% improvement figure in comparison with 2019. The two year increase largely comes as a result of consumers spending more time at home, and subsequently spending more on home improvements and entertainment.
Retailers primed for the discount season
So when will the spending begin? Last year marked a change for the season and its normal pattern with a much longer promotional season. Consumers were urged to shop early due to the strain on the supply chain, and significantly Amazon positioned its Prime Day in October, a month earlier than Black Friday in November.
Amazon moved Prime Day back to its regular summer slot this year, and it remains to be seen whether they will launch another promotion in October to match its 2020 position. I wouldn’t bet against the ecommerce giant pencilling in another sale for that valuable slot again, whether it is another branded Prime Day or otherwise. If it does, then other retailers will follow suit and we will get another lengthy promotional period like we did last year.
Christmas shopping starting earlier this year
There are some warnings of issues that could dampen the mood this year however. Pandemic related problems could arise of course, along with truck driver shortages and global supply chain disruptions that may delay goods arriving to the UK at all. Reporting by The Observer found that retailers are already warning consumers to get thinking about shopping for Christmas to avoid disappointment. It’s the second year in a row where such implications have been highlighted. It is becoming clear that consumers are hearing that call, a recent Ebay survey showed that 41% of shoppers are aiming to get their Christmas shopping done before December even begins, as opposed to just 25% last year.
Retail as ever will continue to rise to any challenge. 86% said they will enact the in-store safety and hygiene measures they relied on during 2020 in order to protect their customers. Meanwhile businesses are acting now to ensure they have the stock they need for a successful Christmas period. With more consumers in store this year, retailers will need to ensure they are managing any issues behind the scenes. They will also need to ensure that customers on the shop floor are getting the purchasing experience they have looked forward to.
As we approach Christmas 2021, consumers are certainly going to have plenty of choice as to where to spend their budgets, and retailers will have to do all they can to make sure they stand out from the crowd. Engaging marketing, whether it be store representatives, training or merchandising activities, can ensure that the consumer knows who you are and why they should be choosing your products. Once that is achieved then loyalty and success will follow, and not just for Christmas.
By Tom Harwood, Data and Insight Manager, Gekko Group
This was posted in Bdaily's Members' News section by Gekko .
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