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Online retailers expect 45% Black Friday boost, but lockdown to temper Christmas growth

E-commerce sales are expected to pick up in the run-in to Christmas, though offline sales will take a big hit.

Online retail association IMRG and the Centre for Retail Research have compiled joint figures suggesting e-commerce sales are picking up quickly during the all-important pre-Christmas rush.

However, the report cautions that while online sales are expanding rapidly, shoppers may spend ultimately £9bn less than they did last year as the nationwide lockdown hurts sales.

What does consumer spend look like for Black Friday?

  • While spending is headed in the right direction the imposition of a second lockdown is likely to draw the wind from the sails of any bounceback, particularly as it coincides with the critical Black Friday sales period.

  • The impact of lockdown in England and restrictions in the other countries of the UK is likely to be muted somewhat by a migration toward online shopping.

  • Online retail association IMRG expects sales to grow between 35-45% during the 27 November Black Friday event versus last year‘s sales, backed up by figures indicating e-commerce has already expanded by 34.9% in the year to October as opposed to last year.

  • Andy Mulcahy, strategy and insight director at IMRG, said: “We were anticipating a huge surge online this peak, and circumstances have conspired to ensure that is the case; the stores are closed, furlough has been extended and shoppers are being advised to get the bulk of their Christmas shopping done before December.“

  • Warning of the potential knock-on implications of spending being brought forward Mulcahy added: “There is a possibility that could mean people spend more in the early weeks of November, pulling some of the volumes away from the Black Friday week – that seems the only reason why the online spend for that period could come in lower than +35%.“

  • IMRG monitors 320 retail sites to inform its findings, observing that 4.3% have already fired the starting gun on their Black Friday promotions – many of which will continue all month – versus 2.3% which had done so by 4 November last year.

  • Justin Opie, IMRG managing director, said: “This does not feel like a temporary development; further evidence is no longer required that this is a permanent shift. Retailers, including those with stores, with strong online propositions, will continue to trade well. Those without, for whom it’s not already too late, must adapt now if they are to survive.”

Christmas habits to change

  • The Centre for Retail Research has projected that shoppers will spend £73.4bn during the six-week run up to Christmas, some £9.6bn (11.6%) less than the equivalent figure last year.

  • Prior to the imposition of lockdown, sales had been expected to rise £1.3bn, with a shortfall attributed to the closure of non-essential stores, logistical bottlenecks and souring consumer sentiment.

  • In all, 49% of sales will take place online in the six weeks from 22 November to 26 December, with cumulative sales growing 58% to reach £12.98bn with individual shoppers spending £1,049 each on average.

  • Pulling the figures south is a predicted 37% fall in offline spend, valued at £22.6bn, with the remaining spend in supermarkets and pharmacies ensuring in-store shopping accounts for 52% of sales.

How retailers and brands are approaching Christmas

  • Retailers have been scrambling to adapt to rapidly evolving circumstances, with supermarkets dusting off the ghosts of Christmas past such as Aldi‘s Kevin the Carrot, to assuage jittery consumers.

  • A foodie comfort blanket has also been prepared by M&S with Olivia Colman and Tom Hardy leading a charity-led ‘food porn‘ twist.

  • A strategic split has emerged between some brands such as Amazon, TK Maxx and Asda, which have openly acknowledged the pandemic in their campaigns – others such as Argos have avoided the subject altogether.

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