By Sean Healy – head of PPC at data powered marketing agency, Jaywing
As the high street finally opens back up this week it is still unknown how the pandemic will affect footfall during retail’s busiest trading period.
While customers will undoubtedly be excited to begin Christmas shopping in earnest, it is quite likely that we won’t see a return of the usual crowds associated with this season.
Despite Government efforts towards supporting bricks-and-mortar stores, such as providing funding for councils to help them reopen high streets safely, and extending trading to 24 hours, understandably, some customers will be deterred either by health concerns regarding the pandemic, or simply the thought of having to queue up to get into a store. This is backed up by recent Think with Google research which states that 61% of UK shoppers say the pandemic will affect how they’ll shop for the holidays this year, as well as Google location data that shows that recovery was slow for high street retail after the first lockdown eased.
As a result, the Christmas gifting period is expected to yield more online sales than ever before. Businesses are already preparing for this, as a report from Bazaarvoice states that 85% of retailers believe YoY online sales will increase this holiday season, and that over half of retail businesses are investing more in e-commerce website upgrades. This represents not only a huge sales opportunity for online retailers but will also lead to an increase in digital advertising, and with it a likely increase in competition which will inevitably lead to increases in CPCs and CPMs that could well eat into retailers’ ROI metrics.
For any retailer competing online it’s important to take a flexible, agile approach to marketing this season and to keep an eye on how the UK wider tier system will affect trading. As we have seen, changes to lockdown restrictions can be made with little warning, so online retailers need to be able to respond to this quickly and be able to keep up with the demand and competition within these locations.
Retailers must ensure they have enough media budget to compete and maximise market share within these locations. Savvy businesses will have the ability to shift budgets quickly at a location level.
It’s also perhaps more important than ever before for retailers to look at what has happened so far this year to understand how this could impact trends over the festive period. The first lockdown brought unseasonal purchasing peaks – the home and garden sector, for example, saw searches increase YoY by 45%. It’s likely that for items such as TVs, sofas and white goods, these peaks could be flatter than previous years’ holiday seasons as people have already made these ‘one-off’ purchases earlier in the year.
With the new ‘Christmas bubble’ rules allowing only three households to mix during the festive season, many customers will be forced to order gifts straight to the recipient as they can’t deliver the presents themselves. Consequently, gift wrapping will be in high demand, so online retailers that offer this service will be at an advantage.
Furthermore, after the year we’ve had, a lot of people will be looking to make Christmas as memorable as possible for themselves and their families. Having missed birthdays and events, consumers will want to make sure that Christmas presents are extra special, therefore, sentimental gifting categories such as jewellery and personalised gifts are likely to see a strong performance. Additionally, many will be wanting to treat themselves, so indulgent items are also set to perform well.
This year, customers will be paying closer attention to returns policies, as more time may be needed to cover any delay in people seeing family and friends over Christmas. Consumers will also require more flexible online returns options, to provide safe and convenient options for gift givers and recipients alike.
With online shopping playing such a large role this year, retailers must be sure that their delivery services are robust enough to deal with the increased demand. Companies that were unprepared for the influx of orders in the first lockdown faced customer anger and dissatisfaction, so ensuring that online ordering mechanisms have the capacity to manage the Christmas rush is a must.
While an exceptional situation, Debenhams has seen over one million shoppers in its online queue trying to get their hands on closing down deals, as well as long queues outside the store. Additionally, the potential loss of high street stalwarts such as Topshop and Burton is fuelling this hysteria as customers clamber to grab a bargain. Smart retailers will make sure they have the capacity to deal with the increased demand.
2020 has been an incredibly challenging year for the industry – adjusting to lockdown, protecting staff and customers with social distancing and, for some, having to reimagine their businesses to suit customer needs. But with foresight and flexibility, this Christmas could offer a huge opportunity for retailers.
To find out more about Jaywing’s retail offering, visit www.jaywing.com.