By Ben Sillitoe
The results are in. Well, most of the larger UK retailers have reported them, anyway, as have multiple industry bodies.
By results, we mean Christmas and peak trading period sales figures – and as ever they provide a polarised picture of the state of the retail sector, making it very difficult to conclude what it all means for the industry as a whole.
One thing for certain is that retail faces many challenges as we move into 2020 and a new decade. That’s not exactly news, but the figures we’re seeing are starting to illustrate just how tough many retailers are finding things – and just how much the pattern of events at their most lucrative time of the year is evolving.
Black Friday takes bigger seat at the Christmas table
UK retailers have been talking about the changing shape of peak for several years now, basically since the US’s Black Friday concept arrived on these shores and really embedded itself in the nation’s psyche around 2014. You may remember that was the year Asda shoppers were throwing punches at each other in a battle for televisions.
From IMRG’s figures for 2019, December’s sales growth fell sharply versus November – it was down by 20% month-on-month, which was the greatest December decrease since Black Friday’s arrival in the UK. As we’ve previously discussed on these pages, Black Friday-fuelled online sales growth was very encouraging in November – and it seemingly replaced some consumer spend usually reserved for the immediate run-up to Christmas.
Black Friday is now well-established as the biggest shopping week of the year. Indeed, the evidence of the Black Friday period becoming increasingly influential is mounting up from several different angles.
Flora Frichou, senior content strategist at Trustpilot, a consumer reviews website, notes: “In 2019, Trustpilot saw a 44% increase in users reading reviews on Black Friday alone.
“It’s safe to say that once again, Black Friday wins the “biggest shopping event of the year” award. However, in the past few years, Black Friday has become more than just a full day of big discounts. It’s become a month-long sale, pushing consumers to buy all of their Christmas gifts early, as well more expensive items such as electronics or furniture.”
Daniel Ennor, chief commercial officer at GFS, a delivery technology company, agrees, saying: “Peak trading in 2019 tells us that the peak trading period, and particularly Black Friday, isn’t going anywhere – but we’ve learnt that this cyber sale moment may take a different guise.
“This year saw retailers extend promotional events across several days or weeks, avoiding the typical single day sales spike; making 2019 the year of ‘Black-vember’.”
Insights from industry
What else have we learned from peak trading 2019? A few of Trustpilot’s and GFS’s fellow IMRG members have shared their thoughts, below.
Citing Black Friday research from eCommerce marketing technology firm, Bluecore, the company’s vice president and general manager for international, Mike Harris, says: “Shopper behaviour during the peak trading period in 2019 proved extremely promising, but the biggest gains have yet to be realised.
“Data reveals that 54% of customers made purchases from brands they had never bought from before and 22% of those first-time buyers are likely to make a second purchase from those brands within 108 days. That means the clock is ticking for retailers convert these peak trading period shoppers into loyal customers that come back year-round.”
Meanwhile, Mike Brown, retail sector lead at Avora, an enterprise analytics platform provider, says there is a decrease in pay-per-click marketing and social media return on investment during peak trading due to the more competitive landscape.
“Companies less able to adapt and change their campaigns and strategies (e.g. lack of marketing optimisation agility) typically wasted much of their budget at the most important time of year,” he states.
Consumers’ growing appetite for Black Friday deals came despite reports from some independent bodies that they should be wary of unauthentic offers.
Victoria Barker, senior client manager at Summit, a digital commerce agency, comments: “Despite early reports claiming only one in 20 Black Friday deals are genuine, shoppers were unfazed by this year’s event, suggesting that Black Friday is still an attractive occasion for UK consumers. The retail environment was particularly stale in 2019, with the prospect of Brexit looming over business and shoppers, it’s no surprise that consumers were more prepared to pick up a bargain during the event last year.”
With such demand being placed on retailers during such a short period of the year, successful businesses are modernising their systems to ensure smooth service. The outgoing Sainsbury’s CEO, Mike Coupe, actually reflected on what was a relatively flat Christmas for the group overall – good in food but less impressive in general merchandise – by describing it as a “standout performance operationally” thanks to the processes and support network the company has put in place in recent years.
Sian Hopwood, senior vice president of B2B operations at BluJay, a logistics and transportation software provider, remarks: “It’s clear that shoppers searching online for deals at the busiest shopping time of the year trust that processes, including super-fast delivery, quick order processing in the warehouse, and seamless parcel tracking, are scalable even at the busiest periods.”
So, standout learnings from retail’s golden quarter are, firstly, that Black Friday – or Black November or ‘Black-vember’ as some are now terming it – is of similar importance to December, if not more important, in terms of capturing retail spend.
And, secondly, retail’s challenges are not going away. They need some help – perhaps from the government, which continues to offer aid to other sectors in their time of need, such as travel and manufacturing, while many in retail feel it is just playing lip-service to making the major structural changes required to turnaround and support their industry.
Finally, although it has slowed somewhat in 2019, online is where the growth continues to be in retail – the end-of-year figures illustrate that. Businesses operating in the sector must get their digital offering spot on to capitalise on that situation as best they can.
By Ben Sillitoe