The term “January Sales” used to mean just that, but no longer, is this, the case. The run up to Christmas saw unprecedentedly high levels of discounting by all of the major retailers, with some breaking ranks as early as the second week in December and with “discounts”reaching record levels of 46% on average.
Retailers Across the UK Count the Cost of Christmas
The reason……the inexorable rise of internet retailing. Data just released by Experian shows that High Street footfall was down 7.6% in the week leading up to Christmas compared with the same period last year and this is a clear sign that shoppers are continuing to move to buying online. The ONS stated that online sales in November hit a record level of 11.9% of the total and it is a reasonable assumption that December’s figures will show another record level of sales.
High Street retailers, desperate to counter the online threat, slashed prices early to try and drag shoppers into their stores. The internet countered this by a raft of “special offers” leading up to Christmas, with “Black Friday” deals being offered seemingly every day of the week, and promises of guaranteed delivery in time for the big day for orders placed as late as 3pm on 23rd – capturing a market that has previously edluded them – the last minute panic buys.
This is the future face of retail. Online sellers will continue to thrive as an increasingly IT savvy buying public demands the ability to browse huge ranges of products from its sofas. The High Street has to find a way to set itself aside – customer service, buying experience, unique offerings and value for money must all be high on the agenda to tempt customers out of their homes and into the shops. And of course those retailers who benefit most of all are those with multi-channel offers, great in-store experiences combined with a good online presence.
What will it mean for the High Street – it will continue to contract and offer a different range of product, but don’t write it off just yet. Consumers still like the buzz of going shopping, touching and feeling the products they are buying and the internet just cannot replicate that experience.
Julian Welch – 2nd January 2014