Follow us

Menu
PARTNER WITH USFREE NEWSLETTER
VISIT TheIndustry.beauty

UK retailers “cautiously optimistic” about Christmas trading with online sales boost

Tom Bottomley
13 November 2020

UK retailers are upping their online capacity and plan to offer greater discounts as they prepare for an uptick in festive holiday spending, despite the uncertainty around physical store openings and holiday sales patterns, according to new research by Capgemini.

Retailers are “cautiously optimistic” according to the annual holiday survey, with over a third (36%) of UK retailers expecting an increase in sales, and half of shoppers (51%) expected to shop more online this festive season than in previous years.

In anticipation of this, 91% of retailers have taken deliberate steps to bolster their online offering. An impressive 47% have improved their website or e-commerce proposition, while 37% have increased their web traffic capacity and 20% have introduced new virtual shopping experiences.

To further attract customers, 52% of retailers will offer greater discounts both online and in-store, while almost a third (31%) plan to offer a larger range of discounted products online.

However, despite these preparations, retailers are less confident that they can accurately predict sales patterns this holiday season compared to last year (26% compared to 46% in 2019).

The threat of lockdowns has been the leading cause of uncertainty for 62% of retailers, while half of retailers (49%) blame supply chain disruption and almost one in three (29%) say the data they base their planning on isn’t accurate due to COVID-19. 

At the same time, only 11% consumers expect to spend more than usual this Black Friday, with just over a third (34%) suggesting they plan to spend less. Less disposable income was cited as the main reason for this (44%).

VP Global Lead for retail customer engagement at Capgemini, Steve Hewett, said: “The holiday sales forecast for the UK is particularly complicated this year. National lockdowns have resulted in a large number of people building up savings, but three in five UK consumers we surveyed had no intention on using this on increased holiday spending.

“While it remains unclear just how much people will spend, it’s the changes around how people will shop that appear more certain.

“The second lockdown will inevitably lead to a further reduction in impulse purchases. With 50% of UK consumers we surveyed planning to make more use of online in the run up to Black Friday and Christmas – even categories where demand will be strong will face a tough fight to capture the attention and spend of customers that have shifted online through choice or necessity.

“Retailers that have managed to improve their online operations and who have put in place new technology and processes to provide better experiences online and in-stores, while quickly growing their digital marketing muscles, will be best placed to capture sales this holiday season. They will have also set themselves onto a stronger footing for the inevitably digital-led shopping future ahead.”

Retailers aren’t forgetting about the in-store experience though, and 94% of retailers have taken steps to attract customers in to their stores. Some 60% are restricting numbers in their shops to ensure social distancing, and 44% have introduced more touchless payment options.

New lockdowns will hopefully not mean these efforts have been made in vain, as with restrictions due to relax in December in the UK, a late surge in Christmas shoppers could be more easily accommodated.

Trends revealed in the research suggests the biggest spenders this holiday season will be younger generations. More than a third (37%) of 18-24 year-olds and 40% of 25-34 year-olds say they have saved money since the start of the COVID-19 pandemic, with the intention of spending it around Black Friday and the holiday sales period.

Consumers in higher income brackets are also more likely to spend more this year than previous years. Compared to a global average of 14%, 38% of those on a salary of £64,000 and above plan to spend more. 

Newsletter banner

Free NewsletterVISIT TheIndustry.beauty
cross