The House of Fraser Christmas advertising slogan couldn’t have been more prophetic: Your Christmas, Your Rules. Shoppers are in the driving seat this year and it’s left the retail sector reeling.
So, three questions retail analysts are asking at moment. How much of a damp squib will the post-Christmas sales be in-store? How big will the online migration be? And how will it affect margins?
Well, new figures from credit data agency Experian and e-tail body IMRG, give us an answer to just one of those questions – but that leaves us with an urgent need to find answers to the other two.
Going straight to question two – retailers will see online sales from UK customers up 11% on Christmas Day to reach £658m, up 22% on Boxing Day to reach £856m, and up 33% on New Year’s Day to reach £638m. That’s great for those omnichannel experts with powerful web ops and for pureplay e-tailers. But those for whom omnichannel is still a work-in-progress, will suffer.
The figures may not add up to the £3bn-plus spent over Black Friday weekend but they’re still impressive. On days when consumers typically head to stores or (in the case of Christmas Day) shouldn’t really be thinking about shopping at all, they’re going to be clicking like crazy on cut-price merchandise.
Importantly, e-tail is now drawing it those of us who would never have dreamed of venturing to a mall on Boxing Day… shopping while still in bed or while chomping on a turkey sandwich is so much more civilised than trying to find a parking space and traipsing around stores.
And in many ways it makes the answer to question three something of a foregone conclusion. Margins for some will be paper thin and there’s widespread speculation that there’ll be a number of business failures come the New Year.
Insolvency firm Begbies Traynor has said UK retailers are “suffering another year of dire Christmas trading”, with over 24,000 of them experiencing “significant” financial distress.
We’re being told that UK consumer confidence is ending 2015 on a high (GfK) but confidence among some retailers must be rock bottom. Despite pulling back on early deliveries of cold weather clothing like knits, boots and coats, they’ve been blindsided by weather that’s stayed so very mild well into December, effectively wiping out the AW15 season for many of them.
Retailers have been discounting – heavily – since at least November with full-price selling a struggle for many. And that’s been affecting the strong as well as the weak with many feeling the need to price-match.
With the ‘January’ sales having already started, it looks like the 2015/16 Holiday shopping season could be remembered by some as the nightmare before, during and after Christmas.