And in the red corner… The gloves were really off and for some businesses, it’s been a very bruising bout!
Christmas 2012 has certainly sorted the men from the boys in the race to secure festive sales. It saw many companies massively exceeding their predicted on-line traffic for November/December.
A decade ago, home shopping was seen very much a niche avenue for new start-ups to get a foot in the door without going to the expense of a retail unit. For established retailers, it was a vanity project, not in many cases particularly well thought out, but offering customers something their competitors didn’t.
Today, it forms a vital part of the overall sales mix and has for the large part been the deciding factor in determining the winners and losers in the annual retail battle. It’s been another record breaking Christmas for internet shopping and in what had been a very difficult year for trading, an analysis of high street retailers’ showed that home shopping had been the main driver for growth. John Lewis now reporting that it accounts for up to 25% of total sales. In essence, those retailers’ with a truly multi-channel strategy have fare best.
So what lessons have been learnt? For some, it’s been a very costly lesson indeed. The obvious examples being HMV, Blockbusters and most recently Jessops- all falling prey to the ever increasing trend for shopping on-line. Although HMV and Jessops had on-line presences they failed to match the channel mix to customer demand. Recent reports in the press indicate that rescue packages from venture capital funds may be possible which is indeed good news. It would be a great shame to lose the only national high street music retailer.
Food retailers haven’t been immune to these problems either. Who would have thought Morrison’s would have suffered over the Christmas period, when they are widely considered to be ‘a good value for money’ store. Without an on-line facility, they really lost out in festive sales and I’m sure it’s something they will be rectifying in the very near future.
The recent demise of Comet shows that no sector is truly safe and many businesses will be reflecting on how best to meet the increasing demands from their customers for multi-channel offers.
Interestingly, ‘pure play’ retailers such as amazon haven’t had it all their own way either. The ability to legally move their operations off shore to avoid UK tax has been exposed and has been met with a backlash from some customers, threatening to boycott their business. It would seem that in this time of difficult trading, the great British public expect everybody to ‘play fair’. How refreshing!
In terms of significant developments in on-line, home shopping trends, the single most important development has l think been ‘Click & Collect’.
John Lewis has been doing it successfully for several years and many other retailers are recognising the benefits and following suit. Customers like to order on line, but for convenience pick the items up from store or a collection point.
With the obvious problems associated with home delivery in terms of having to be in and recent stats showing the poor service offered by some couriers, it surely has to be the way forward.
Amazon is already trialling a collection box scheme in strategic locations and is considering opening stores purely for collection.
Non- food retailers such as Tesco’s have also recognised the demand for this and have been experimenting with drive through collection kiosks for groceries.
Will it be long before some stores become pure collection points? It would certainly change the face of our high streets. What is clear though, is that if retailers are to compete effectively in the future, they need to fully explore and embrace the multi-channel sales approach and stay one step ahead of the competition.