Why Christmas can be still be the golden season for retailers

What can we learn from 2019’s Christmas sales season?

It’s safe to say that nobody is approaching the Christmas sales this year with quite the same exuberance as in years gone by. One thing to note, however, is that while we may look back on last year with a kind of longing for a time before the pandemic struck, consumers of 2019 had other concerns: Brexit.

Despite the economic turbulence spurred on by leaving the EU, retail sales were predicted to grow in 2019’s holiday season. But while they fared well, the rate of growth was slower than that of 2018 at 2.5%. Still nothing to be sniffed at overall and the season put the retail sector in good stead for 2020.

What’s most interesting to note about 2019’s sales figures is that digital sales were directly responsible for keeping the retail sector afloat, accounting for a record 28.2% of all total sales. Even without a global pandemic, brick and mortal retail was on the decline, dropping 3.8% overall.

What does this mean for 2020?

Predicting holiday season spending isn’t always easy and the sudden second lockdown just five weeks before Christmas hasn’t done anything to negate the complexities in the retail forecasting.

It’s not all doom and gloom, however, as we know shops weathered the first lockdown much better than expected. For example, September’s retail sales displayed an increase of 5.5% on February’s pre-pandemic levels, after five consecutive months of growth. In particular, home improvement sales continued to do well, and most significantly, the proportion of online sales was at 27.5%, compared with 20.1% reported in February.

So how has the pandemic affected holiday shopping forecasts?

Retailers are understandably concerned about how continued restrictions will affect the holiday sales season, particularly as uncertainty around the economy and personal finances has led many UK consumers to get ahead of the game and do some of their holiday shopping early. But the question on every retailer’s lips is: Will we see an early peak?

While brick and mortar shop sales are facing a predictable decline, retail ecommerce sales are forecast to rise by 16.7% to £28.51 billion ($36.38 billion), accounting for 32.2% of total UK holiday sales.

This means that the impetus remains on retailers to make the most of their ecommerce stores. If done well, there could be huge benefits for those retailers who do.

With all this in mind, how can they do this? Here are our top tips:

Market. Market. Market.

This little piggy went to… No, not really, we’re kidding. In all seriousness though, this is not the time to hold back on your marketing budget, even if it seems counterintuitive to spend.

In fact, companies that maintained their social marketing budgets over recent lockdowns have been shown to reap the rewards, as consumers and brands interacted much more on social media than they did pre-pandemic. From this we can tell that consumers still want to see and engage with businesses online this year.

This provides an opportunity for retailers to use customer data from web and social analytics to personalise their marketing efforts with deals that are tailored specifically to their consumers. Research has shown that good personalisation can boost profits by 15%.

Make the most of digitisation

Digital stores have a whole host of benefits over brick and mortar retail. For instance, there’s only so much you can do in a physical store to streamline the experience and personalising it is even harder. But online? Anything is possible.

Research has shown that more people use mobile devices than desktops, so it’s important to optimise your ecommerce store for mobile. As research has indicated that 40% of mobile users will leave a site that takes more than 3 seconds to load, mobile users are clearly impatient. As a result, it’s vital that you speed up your loading times for mobile.

Another top DivideBuy tip? Optimise your site for mobile search using Google’s mobile-first indexing.

Provide options to get conversions

Over the last few months, consumers have adjusted to the convenience of online shopping, especially as retailers have upped their game when it comes to speedy delivery and easy returns. This means that anything retailers can do to make the ecommerce experience even easier for their customers is a welcome addition.

One way retailers can get the edge on their competitors is by providing choice at the checkout – this is especially important during a time of uncertainty when consumers are keen to make sure they keep control of their finances. Help them do this by giving them the option to pay for large purchases in instalments.

Platforms like DivideBuy integrate with your website seamlessly, giving your customers more control over how they spend their finances, with full visibility over their repayment plan, and absolutely zero interest added to the cost of the purchase.

The proof is in the (Christmas) pudding, as after partnering with DivideBuy, online coffee machine retailer, Barista Club, experienced a 50% increase in sales. That’s certainly something to be merry about this Christmas.

To find out more about what DivideBuy can do for your online retail business, visit our retailer page or book a demo.

Page last updated: 08 September 2021

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