Author: Marketing, 09 January 2018

‘Tis the season to be fickle

This Christmas, just like last and the one before that, presented retailers with the challenge of fronting up to the online threat.  But is online, in itself, actually the threat, or is it a competitor which has raised the expectations of good customer service?

Rather than just relying on recruiting new customers, online retailers are adept at breeding brand loyalty; knowing that retailer can deliver (literally and metaphorically) why would the customer shop anywhere else?

But the fickle customer is as much of a challenge to the online store as to the physical one – hop to a new website, or step next-door.  Brand loyalty takes time to build and a mere moment to demolish.

Christmas

The FSP View of the good, the bad and the annoying retailers

Carefully placing their building blocks of brand loyalty are:

Anyone who delivered quickly, reliably and conveniently:

  • Amazon
  • AO.com
  • DW Sports
  • eBay – but with fingers very crossed

Anyone who planted ideas in our heads, grabbing our attention and making suggestions whilst giving us great Christmas options:

  • ASOS
  • House of Fraser
  • John Lewis
  • Aldi
  • Any retailer or centre which provided a pleasant shopping experience (were the shops quieter this year?)
  • And any centre which made parking easy or free

On the other hand, demolishing any brand loyalty which may exist retailers (even, sometimes, the best) who:

  • Delivered late
  • Amazon (not all good then)
  • Listed out of stock items on the website
  • M&S
  • Charged for delivery
  • River Island
  • Sportsdirect.com
  • Brought in clueless Christmas temps
  • John Lewis
  • Ran out of something which is a perennial winner
  • Thorntons
  • Didn’t act responsibly
  • Boots (we’ll save this for another day)

What did we spend? Credit, debit or cold hard cash

According to a survey by price comparison company uSwitch, UK shoppers spent an average of £452 each on credit cards this Christmas, as almost £8.5bn was spent that way over the festive period. But with 40% of the UK population without a credit card (2016) and with a survey commissioned by FSP showing the total value of credit card spending accounts for c.29% of all annual transactions, the total spent on Christmas will be somewhere in the region of £20 to £30 billion.

Mastercard

Anecdotal research suggests that this credit card spend is neither predictable nor omnipresent. People can’t be pigeon-holed by wealth, age or status; credit cards meet very personal needs and their usage is therefore as individual as the people who use them (or not).  Whereas few people exclusively use credit cards, it would appear many do only purchase from available funds (or an overdraft). In fact FSP research shows as many people use debit cards for large purchases (over £200) as they do credit cards. Despite rumours to the contrary cash is not dead yet either – all those secret Santa pressies and last minute stocking fillers for under a tenner were more likely to be brought with a bit of paper (or is that plastic now) with the Queen’s face on than any other payment method.

Online shopping

Online

Despite the scare stories of missing parcels, it seems that most people did at least some online shopping for Christmas.  Although we believe a significant proportion of sales touch a physical store in some way (browsing, click-and-collect, return) the convenience of armchair-shopping is making hefty inroads into overall sales. ONS figures (not yet released for the Christmas period), suggest 17% of sales are online, but this is skewed by our hefty food bills only accounting for 5.3%.  A quick straw poll in FSP shows that over 50% of Christmas shopping was done online (that’s why the shops were quiet!), reinforcing once again that retailers need a seamless multi-channel experience so that something seen, touched and tried on in store is then not a lost sale.

The Economy and all that

Inflation is inexorably climbing, whichever measure you use, but has that put the mockers on our spending habits? Not at Christmas it would seem.  We have little hard evidence yet, but it would appear few people were cutting back before Christmas, with ONS recording an increase in volume of sales even whilst the value increased even more.  In FSP, inflation, doom-mongering over Brexit and the Black Friday Effect impacted little on approach to Christmas spend.

crystal ball

And now, to the future….

Now Christmas is out of the way, we will spend a bit of time analysing the sales (issuing more comprehensive reports as retailers release their figures), but then we’ll be moving on.  

Retail is resilient, finding ever-more innovative ways of morphing to please the shoppers, so in FSP, we expect to see:

  • Customers leading the evolution of formats, channels and locations
  • An increasing number of physical stores getting on the brand experience band wagon to attract shoppers
  • The next big thing. New and innovative brands soon lose their ‘wow’ factor so who will be next on the expansion drive? We’re keeping a close eye on House, Sostrene Grene, Neon Sheep and H&M’s Nyden
  • The next Primark or Next, which is hiding in the wings, waiting to emerge. (High Street stallwarts have to start somewhere)
  • More interactivity – a more seamless incorporation of technology in store (including delivery innovations) to drive footfall on high streets and in shopping centres
  • A rise in independents on the high street
  • The increasing emergence of new formats, particularly with the focus on “experience”

Whatever 2018 brings, we know that everyone is going to have to up their game, which can only be a positive for consumers.

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