Az Ahmed, retail marketing expert at SmartFocus, shares some valuable Christmas shopping insights. Ahmed helps to build intelligent solutions for some of the world’s largest brands – including Nestle, Mercedes and House of Fraser. SmartFocus’s marketing solutions take the guesswork out of marketing and help organisations, ranging from governmental agencies to financial services, to uncover new opportunities within their data
With Christmas, Grey Thursday, Black Friday, Cyber Monday, and Small Business Saturday upon us, retailers need to get ready for the festive online shopping onslaught. E-commerce is set to play a key role in Christmas spending this year, with 40% of physical sales digitally influenced and click and collect almost doubling to £2.5bn, boosting sales over the festive season to £42.2bn, according to new research by Deloitte.
If you’re a retailer, this time of year signals the start of a high-volume, high-stakes opportunity for your business and one in which your customers will no doubt label you as ‘naughty or nice’. And you only have a couple of weeks left to make the most of it for another year.
With customers asking for their online and offline experiences to be seamlessly integrated, retailers can find it tough to cope with the technological and infrastructural changes that this requires. John Lewis reports the ability to mix and match purchase channels and delivery options is now the norm as it offers more convenience to customers. Shoppers want to collect orders in a way that fits seamlessly into their everyday lives.
Retailers of any size discount the value of click-and-collect at their peril. Considering 78% of consumers consider it ‘important’ that merchants enable in-store pickup of online orders, new data from Internet Retailer’s 2014 Top 500 Guide reveals only 51 retailers in the Top 500 – about 30% of the retail chains – allow consumers to buy online and pick up in store. Bridging this divide will require marketers to reimagine the role of the store in fulfilment.
Nordstrom is a good example of a retailer that is innovating with its click and collect marketing strategy. When consumers shop on Nordstrom’s e-commerce site, they can narrow product selections to show only those available for in-store pickup. Once they have chosen a category or page, they can select the tab labelled ‘store availability’ under the ‘narrow by’ options. Then they can enter their ZIP or postcode and the distance they are willing to travel, from five to 100 miles, and the page updates.
Importance of omni-channel
Customers want an omni-channel experience when shopping, which is something a lot of retailers struggle with. According to a recent report published early this year by Accenture titled ‘Customer Desires Vs. Retailer Capabilities: Minding the Omni-Channel Commerce Gap’, 94% of retail decision makers surveyed said their companies face significant barriers to becoming an integrated omni-channel company.
The report found 71% of shoppers expect to view in-store inventory online, and 50% expect to buy online and pick up their purchase in a physical store. Yet, just 36% of the retail decision makers surveyed said their companies are able to provide customers with in-store pickup of online purchases, online visibility of cross-channel inventory and store-based fulfilment of online orders.
Meanwhile, in-store pickup of purchases by consumers emerged as a key capability that bricks and mortar retailers must be able to provide their customers if they expect to compete effectively against their online-only peers.
The reasons for the popularity of click and collect vary with 47% of respondents stating they use in-store-pickup options to avoid online shipping costs, 25% said that it was because they could collect their orders on the day of purchase and 10% simply because they find it more convenient to pick items from a store than having them shipped to their home.
Despite the difficulties in getting click and collect services set up, certain retailers are jumping at the chance to offer this service and using it as a differentiating factor for their businesses. Retailers are working with places like airports, railway stations and supermarkets to offer customers the ability to pick up goods bought online.
Customers have embraced online shopping and high street retailers are leading the fight back against online stores by offering customers a wider variety of options to pick up their goods. One of these retailers is John Lewis, which allows its goods to be picked up from its own stores, Waitrose outlets and even independent retailers, via its partnership with Collect+.
With almost a third of all sales now online, Christmas is set to be a bumper period for John Lewis with about 37% of its sales generated online. The majority of that growth is being led by click and collect which the retailer says is up by 49% this year already. The supermarket giant Tesco also said that 70% of its online orders for fashion items and home products were ordered online and collected in store.
The rise in click and collect seems to be linked to how busy people’s lives have become and the impatience at having to wait for goods bought to be delivered. Delivery charges and items being delivered at inconvenient times have also pushed customers to use click and collect services where they can. This trend doesn’t seem to be slowing down anytime soon and is one that should be embraced by retailers or they will find that customers take their business elsewhere.
SmartFocus’s annual Retail Christmas Shopping Insights survey found:
How much will consumers spend?
- UK consumers will spent £18.7bn on gifts this Christmas
- They’re buying for nine people and spending an average of £50 per person
- 23% of men and 19% of women will spend between £50-£100 per person – 8% of men will spend more than £200 per person
- 45-54 year olds are most likely to spend over £100 per person
When will consumers shop?
- 44% of UK consumers will complete the majority of their Christmas shopping before or during November
- 37% will complete the majority at the beginning of December
- 17% will wait until the week before Christmas to do their shopping, whilst 2% will leave gift shopping until Christmas Eve
- 22% of men wait until the week before Christmas to buy Christmas gifts
- Surprisingly, men 18-24 are more prepared than other age groups – 54% are ready for Christmas before or during November
- Women are much more prepared – 15% have completed most of their shopping in October
How will they shop?
- A quarter of men will rely on shopping in-store for gifts
- Women are definitely multi-channel gift shoppers – 68% will use both virtual and physical stores to shop this Christmas, compared to only 50% of men
SmartFocus commissioned a survey to 800 UK consumers aged 18-65, ensuring responses were representative of the general population. SmartFocus is an innovator in messaging and communications, enabling the world’s largest brands – including Nestle, Mercedes and House of Fraser – to understand and connect more closely with today’s connected consumers; whether that be via web, mobile, email or social channels. SmartFocus provides its clients with the rich data, intelligence, and tools needed for context aware marketing in a mobile world. SmartFocus. In Place, In Time, Insight.Download the SmartFocus guide to effective, contextual marketing this Christmas here