For multi-channel retailers, do the best insights for future strategy and development come from trading results across the entire year, or from the peak trading period around Christmas? Analysing the stream of holiday updates that have emerged in the past two weeks, there are a number of fascinating observations into how customers operated this past year before Christmas in both food and general merchandise.
Last week, department store groups Fortnum & Mason and John Lewis both reported online sales growth of more than 20% over the holidays, leaving no question that ecommerce has come to play a permanently strong role in the retail sector, particularly at the year end. Long-term planning for a company is very important, but paying extra attention to trends in consumer behaviour in this short but critical period of time can provide invaluable insights for plans to expand and to grow in almost all companies.
Although we’ve been placing digital executives for over 15 years, the “baby” here at MBS is our online practice – and aren’t we happy to have gotten involved in this fast-growing sector! Online sales across the board have grown nearly 40% in the past two years, and are projected to grow another 44% by 2019. Nearly every company we’ve heard from in the new year has mentioned how quickly their online sales grew – especially during the Christmas period. Handbags and accessories retailer Radley, who reported a third consecutive year of strong Christmas trading, was amongst those to report double-digit growth online. CEOJustin Stead told us that ecommerce “was significant again and it remains a primary growth strategy for the future while ensuring that our entire multi-channel offer is consistent in tone of voice and operationally efficient.” Large and small format retailers alike such as Debenhams, Ted Baker and White Stuff all reported online sales increases in the double digits, showing a huge amount of growth in this sector – especially when compared to an increase of only 1% in overall UK retail during the period.
Meanwhile, online pure players continued to benefit across the board, with Asos reporting a 22% increase in global sales in the three months leading up to Christmas, and an 18% increase in active customers online. According to retail expert Julie Palmer, “this Christmas trading period seems to mark the death knell for the traditional retail model as we know it as customers now increasingly choose to shop online for the best prices.”
Online growth expanded even as some companies suffered from the unbelievably warm late autumn and early winter that we experienced. A number of retailers, particularly fashion, noted the impact on sales, yet continued to see growth online.
In its early December report on US holiday shopping trends, market research group Kantar looked at the continual growth of Cyber Monday when compared to the other two traditional shopping days – Black Friday and Thanksgiving. The height of ecommerce during the holiday shopping period truly highlights the fundamental shift in consumer preferences, and I’m happy to say that MBS will play a role in making ecommerce business even more successful this coming year.
With such a strong future in online shopping, do you think digital pure players will ever be able to replicate the beloved Christmas displays we see every year? I’d love to hear from you at email@example.com, and have a great weekend.