Andrew Fowkes, head of retail centre of excellence, SAS UK & Ireland, claims the next two weeks will be critical for retailers if they are to survive the retail war, unpredictable consumer demands, unforeseen weather conditions and returns on impulse buys.
“Consumer demands can be hard to predict at the best of times,” he said. “Sales figures vary from year-on-year, and with the added external factors coming into play, such as competitor promotional activities and changing weather conditions, retailers cannot rely on historic sales reports or gut feel to forecast demands and merchandising needs.
“The last two weeks before Christmas will be critical for retailers. Accordingly to our survey, 41% of shoppers will be hitting the shops and e-commerce sites, with almost a third of shoppers planning to do the bulk of their shopping the weekend before Christmas Day. However, our survey also finds that there is disconnect between consumers and retailers, in that a much greater proportion of retailers (two-thirds) expect the same weekend to be their busiest trading period.
“Despite the growth of available customer data, many retailers are not using it to anywhere near its full potential. Nearly half (44%) still rely on ‘gut feel’ and therefore lack the insight that data analytics could provide to understand how shoppers behave, making it difficult for them to forecast demand and manage stock levels appropriately. Given the onset of publicised shopping days like Black Friday and Cyber Monday, retailers cannot rely on instinct alone to predict consumer behaviour and measure the impact on sales. Anticipating the pull forward factor of trade and proactively designating stock in preparation is essential for a successful run-up to Christmas.
“The popularity of click and collect service only adds an extra layer of pressure. Not only are retailers expected to have clear view on their stock level across the warehouse and shop floor, they also have to deal with unexpected returns in store. This could lead to “return and run” where consumers return unwanted online purchases in store, or even “drop and shop” where, as part of this process, they also make new purchases in-store.”