Savvy Marketing head of insight Alastair Lockhart says despite a flying start to the sales 2013 won't be easy for retailers
The Sales have set off to a flying start, with footfall across large parts of the country up compared to last year. This news seems a fitting end to the retail calendar, during a year which has been themed around the continued rise of the savvy shopper.
That shoppers are keen to find a good bargain is nothing new, but this year has seen shoppers' efforts and abilities to seek out the best bargains elevated to new heights – a point highlighted only last week as droves of shoppers held their nerve, leaving their Christmas shopping to the last minute, convinced that The Sales would start before Christmas day (they were of course not disappointed).
The Sales period is clearly important to retailers, not only because it provides a further boost to footfall and sales, but because it is crucial in clearing stock to make way for the New Year ranges. Retailers will be pleased to see the Sales get off to a good start and, if the shoppers that I have spoken to over the past few days are anything to go by, the rest of the clearance should go as they hope.
Unfortunately that is probably where any sense of mild optimism ends. Following what is likely to be described as an acceptable Christmas performance, where even the best retailers have had to work incredibly hard to keep sales up, the prospects for the start of 2013 look pretty bleak. Consumer confidence is already low and our latest research shows that only around half of shoppers expect to see any improvement in the economy in 2013.
A more alarming finding from our research emerges when we look at shoppers' main concerns and sources of anxiety. Forget keeping up with the Jones’ – it is the cost of gas and electricity that heads the list, followed closely by food.
Does this herald a shift away from wants to needs-driven retailing in 2013? For a growing proportion of the most hard up shoppers it probably does and that needs to be reflected in retailers' offers. But let's not get too carried away.
During tough economic times, for many, aspiration in its different shapes and sizes is even more important to make the most of what they have. For retailers this doesn’t necessarily mean encouraging shoppers to spend a fortune, but helping them enjoy the smaller things in life and giving them reassurance that the money they part with is well spent. To a large extent this is a theme which continues from 2012. The difference in 2013 will be that the stakes for many families are now higher than ever.
A tough outlook for shoppers, rising rents and the continued shift of sales from stores to online, will undoubtedly mean more retailers will be struggling and many going out of business in 2013. It's worth reminding ourselves that most high street retailers' business models were designed for different times when shopper demand seemed insatiable and space growth was the key to success.
The market has changed significantly and in 2013 it will be the retailers who are able to keep adapting and reinventing themselves in the same way as shoppers are having to, that will thrive in the New Year and beyond.
Alastair Lockhart is head of insight at Savvy Marketing.