Only 297 sleeps left... Retailers, start planning for Christmas 2012
Carat offers some insight into key retail findings from the 2011 festive season and how retailers can best plan for Christmas 2012.It may only be March, but UK retailers are already gearing up for Christmas, checking last year’s results and looking at how these can be improved upon in 2012.2011 wasn’t the best year for the high street, with multiple retailer collapses, but retail actually managed to pick itself up and deliver reasonably good results in December; up 6.2% on 2010.Food and non-specialised stores were both up, and textiles, clothes and footwear were the big winners, collectively growing 6% on volume and 8% on value YoY. Other stores and household goods were both down YoY. Internet-based sales increased their proportion of total retail in December to nearly 11%, growing by two percentage points and delivering total sales of nearly £840 million.The headline figures (and some manipulative reporting) hide scary trends with many businesses suffering declines and huge pressure on margins, with discounting being the theme of the day. A recessionary climate heightened the focus on value for money and consumers used everything at their disposal to ensure they got it. Retailers that focused on what they were known for appeared to reap the benefits, while those that cast their nets too wide and delivered over-complicated messages stumbled – Tesco most notably.Within the food sector, value was of key importance; half of FMCG purchases were “own brand” and well over 50% were made on promotion. Interestingly, consumers are modifying their shopping behaviour to focus on value; three quarters claim to have introduced greater planning in order to combat impulse purchasing.Purchases skewed ever closer to Christmas; in many cases Christmas shopping occurred after the event itself, with record footfall and sales being delivered from Christmas Day (online) through to the end of December.Comparison shopping has taken hold and is increasingly technologically driven, with a third using their phones to check prices and reviews, and a fifth directly comparing products in store via their mobile phones.The proportion of internet sales is estimated to have grown by over 20% YoY, with mobile and tablet sales growing by more than 50%. As smartphone and tablet penetration continue to grow (Apple sold twice as many iPhones in Q4 2011 as in Q4 2010, and the iPad outsold HP PCs in Q4 2011), we would expect this rapid growth to continue.Footfall has been high post-Christmas and throughout the sales period into January. Consumers are certainly hanging out at shopping centres; looking for bargains, but not necessarily spending on the high street or at all. The social element of shopping is alive and well and being increasingly augmented by technology.With the 12 days of Christmas now feeling like the distant past, we have created the 12 best ways to plan for another Recessed Christmas in 2012. Source: Offices for National Statistics, Symphony IRI Group Carat analysis: Implications for Christmas 2012
- Focus on your core business and your core proposition, understanding your customers’ requirements and their reception to discounting and offers.
- The delayed shopping trend could push much of the consumer spending into the weekend of 22 and 23 December, impacting on media flighting and maximum reach curves. Will sales start that weekend rather than Boxing Day?
- Explore new ways to drive efficient coverage; TV will remain a compelling way for retail to communicate, but the supply of impacts suffered in the run up to Christmas 2011, with largely retail driven surges in TV demand and with X Factor down 7.3%.
- 2012 will be more digital than any previous Christmas; mobile and tablet will be a big part of that. Friendly, transactional sites will be a must to capitalise on the increased consumer demand for easy, anytime, anywhere retail.
- Christmas Day is software day. 6.5m Angry Birds apps were downloaded on Christmas Day, and a special addition iPad-only Sunday Times (sponsored by John Lewis) was released on 25 December. With even more hardware scheduled to ship this coming Christmas, there are post gift opportunities to reach consumers via their shiny new smartphones and tablets, in a moment when they will be hyper engaged.
- Distribution dilemmas: third parties will have learned from 2011 it will be difficult to meet increased demand in a potentially compressed time period through traditional methods. Partnering with other companies who have local distribution or pop up distribution centres in cities may be interesting options to consider.
- 3 screen communications will be increasingly important to integrate as consumers move seamlessly from big screens to tablets, PCs and mobiles; all connected devices.
- Pure play online retailers are starting to use a physical presence to create brand experiences for customers, e.g. pop up shops. The high street needs to respond by upping their game and delivering on the experience of shopping above and beyond the pure value equation.
- Use media partnerships to add value to the retail experience, e.g. fashion brands leveraging magazine partnership in-store and via digital channels, or food retailers giving additional value by syncing the online shopping basket and the in-store experience with recipes and lifestyle content.
- Digital evolution of the high street. Learn from the digital retailers and apply this to the physical store location, making it more digital, using all your assets in store, changing them more frequently. Using digital applications to make the shopping experience more connected.
- Discounting and promotions will be important to bargain-hunting consumers over Christmas 2012. Media can help deliver these programs directly into consumers’ hands through technology integrations.
- Connecting the retail and social sides of shopping will drive increased customer engagement. Allow visitors to share via online Facebook integrations and apps that bring social media onto the high street.
Content created with:
Carat UK & Rubber Republic
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