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By Mike Stephenson
The UK’s shoppers have changed their habits when it comes to Christmas shopping. That’s the evidence of figures from the National Office of Statistics (ONS) and it is reflected in the volume of fulfilment services we processed during the peak period at the end of 2017.
The days of leaving your present buying to the last minute, or at least until the first window of the advent calendar has been opened, are gone. Figures from the ONS show that retail volumes fell by 1.5% from November 2017 to December. In a year that showed the lowest growth since 2013 (1.9%), this was bad news for high street retailers hoping for a bumper Christmas, but for those savvy enough to respond to the trends of the last few years, there were reasons to be cheerful.
Black Friday (24 November last year) has driven retail volume from December back into November. But consumer focus is no longer just on Black Friday itself, or the following Cyber Monday. As retailers vie to leverage maximum advantage from the Black Friday concept, juicy discounts are appearing earlier and earlier in the month and running on for several days after the event. Black Monday has become Black Fortnight.
According to the 2017 Retail Survey from KPMG, less than half (44%) of Black Friday sales were made on the Friday itself. A similar volume of sales (45%) took place in the 10 days either side of Black Friday, with a further 11% made outside that period.
Despite the increased focus on the Black Friday period, retail sales volumes for November increased by just 1.6% year on year, and 1.4% for December. But it’s a very different story when it comes to online sales. In this sector November sales were up 10.2% year on year and December sales were up 9.4%. Among the best performers in this sector, according to the ONS, were sales of clothing, beauty and household goods.
These figures tally with our own experience of the pre-Christmas peak period, when we processed 74% more orders than we did during the same period in 2016. Our fashion fulfilment and beauty fulfilment operations were flat out during Black Fortnight and demand remained high right up until Christmas. This was the first big test for our new, state-of-the-art warehouse at The Birches in East Grinstead and we’re happy to say it performed brilliantly.
Equipped with ever more sophisticated mobile technology, shoppers are increasingly tending to make their purchases online, but they want to be able to see and feel the goods before they do. More than half of UK consumers use the internet to research their purchases, looking for the best deals, but the KPMG survey showed that 40% still like to visit the physical shop at some point in their buying journey. It’s not surprising, then, that retail brands with a physical presence are performing best in the online retail sector. Textile, clothing and footwear stores recorded a 20.9% year on year increase in sales in December, and household goods stores saw sales increase by 17%.
The conclusions from last year’s pre-Christmas period should help retailers to plan their strategy, not just for this year’s peak period but throughout the year. For those who tried to embrace the online trend but were let down by their fulfilment, Black Friday and Christmas will have been a sorely missed opportunity. Now would be a good time to find a logistics partner you can rely on to cope with the increased demand that looks inevitable this year.
The migration to online is only going to grow, and with shoppers receiving more and more purchases through the post rather than over the counter, the quality of a retailer’s fulfilment services will become an increasingly key selling point. It’s not just the delivery service that matters either. Returns are becoming increasingly important, as shoppers develop the habit of buying multiple versions of the same product with the intention of choosing one and sending the rest back. Nearly two thirds (61%) of online shoppers say a free returns service is important to them.
So while economic uncertainty may continue to suppress retail spending for a while longer, the good news is that there are exciting opportunities for retailers who embrace online and extend the quality of their in-store experience to the internet, in partnership with a good logistics and fulfilment partner.
If you want to talk to us about handling your retail fulfilment, please call us on the number above or use the contact form found here.