2020 was a tough year for stores and Christmas was no exception. Sales increased over the festive period, but not as much as many retailers had hoped:
- Sales rose by 0.3% in December, far lower than the predicted growth of 1.2%
- Much of this growth came from the fashion sector, where sales jumped by 21.5%
- The average UK shopper spent £37 less than usual on Christmas gifts
The bad news continued after Christmas. The UK entered a third national lockdown on 6th January, depriving retailers of the chance to make up for lost profits with new year sales. Helen Dickinson is the Chief Executive of the British Retail Consortium. She sums up the disappointment of Christmas 2020:
“There was no Christmas cheer for retail as the industry found itself in the firing line for last-minute coronavirus restrictions.”
Thankfully, things are looking brighter in 2021. With over 80% of the adult population now double vaccinated and no new restrictions on the horizon, stores can expect to end the year on a high. That said, this will still be an unusual Christmas. Here are five changes you can expect to see:
1. Customers have more money to spend
One of the few positive effects of the pandemic was its impact on savings. With stores closed and few opportunities for leisure activities, many people saw their bank balances swell:
- UK savings reached their highest level since 1963.
- The average household was able to save almost 20% of its annual income
- The UK population amassed an estimated £190 billion in additional savings
People are entering the Christmas season with money to spend and a desire to make up for last year’s disappointment. 78% of shoppers plan to use their lockdown savings for Christmas shopping, and 30% plan to spend more than usual this year.
2. Christmas shopping will start early
A recent survey found that 45% of UK shoppers are planning to make their Christmas purchases early this year. There are three main reasons for this:
- 31% are worried about supply chain disruption
- 35% are concerned about items arriving on time
- 35% fear a last-minute lockdown before Christmas
A quarter of early Christmas shoppers are aiming to be finished by the 30th November. This means that Black Friday will be especially busy. Some shoppers will turn out for the bargains, but many will do so just to get a head start.
3. Customers will favour out of town shopping
Last month, retail intelligence agency Springboard released its annual Christmas forecast. At first glance, the predictions are worrying. Total footfall is expected to drop by 17% compared to 2019, but this is only part of the story.
On closer inspection, the forecast shows shoppers moving to new locations rather than abandoning physical stores altogether:
- Footfall at retail parks is expected to be 5.5% higher than it was in 2019
- This will rise to 11.8% in the final two weeks of the year
This is good news for out of town retailers, but it should also be food for thought for the high street. Customers clearly favour the convenience of out of town shopping, so it’s up to other stores to replicate this.
4. Experience shopping is back
The Springboard forecast shows another interesting trend. It seems that the biggest growth in high street footfall will be seen in major cities as shoppers from smaller towns visit regional capitals.
- The average shopper plans to spend over £150 on interactive shopping experiences this year
- 52% of customers are looking forward to shopping in store for the sheer joy of it
Consumers are clearly keen to make up for lost time. Whether it’s live music, children’s games or just some free food samples, shoppers will be drawn to stores that offer something out of the ordinary.
5. Click & Collect is here to stay
Not everything will be different this year. Click & Collect dominated the shopping landscape in 2020, and this looks set to continue:
- Click & Collect sales increased 24% in the week leading up to Christmas 2020
- Shoppers are 48% more likely to use Click & Collect this Christmas than in previous years
In order to capitalise on this, you will need to make your Click & Collect service as smooth as possible. This is where we can help:
- Headsets allow colleagues to check on Click & Collect orders without visiting the stockroom
- Customers can check on Click & Collect orders via call points, saving them from joining the main queue
- Call points can be placed on Click & Collect desks, allowing colleagues to get on with other tasks when there are no customers
Retail is changing, but there’s no need to worry. We can help you to adapt to the new landscape so that you can have a successful Christmas and a prosperous new year. Give us a call to find out more.