The Retail Sales Index
Last week the ONS (Office of National Statistics) released the latest figures from the Retail Sales Index, which tracks the ongoing levels of consumer spend in UK retail. Normally, a new edition of this would not reveal anything particularly exciting, just a percentage point change here and there. But I now find myself waiting with bated breath for the new figures each month as they showcase the seismic changes in customer behaviour we have seen since Covid-19 forced the world into lockdown. There has already been plenty written about the impact of lockdown, but we will reiterate the numbers; from March-May 2020, average weekly sales for non-food retail dropped by 39% compared to the same period last year. The average change for the 12 months prior to that was 0.7%.
As you can see from the above chart, with many stores re-opening in June and a degree of “normality” returning, sales are starting to return to their pre-lockdown levels, but are still some way short of last year. However, one area that does not appear to be heading back to “normal” is the share of those sales occurring online:
This meant that last month saw the highest month for online, non-food retail sales the UK has ever seen. It was 11% higher than Christmas last year, with £1 in every £3 spent on non-food items in the UK spent online.
A new online audience
This means there is a whole new audience of customers who are new to online shopping and we should be asking the question, “how prepared are retailers to reach and serve these customers?” Whilst some inefficiencies in online conversion could have been tolerated when it only accounted for 10-15% of sales and priorities were elsewhere, today those inefficiencies could be costing you millions. As Paul Martin, UK Head of Retail at KPMG, said on our webinar last week, retailers will need to consider new business models and partnerships to survive in the post-Covid world.
This does not mean you need to rip up your current strategy and start again; a strong brand and value proposition are as important as ever, but do you have the right tactical expertise in your organisation to drive customers to your website and convert them once they are there?
Your incumbent agency might be doing a great job of creating salience for your brand, but you need to optimise your search visibility to maximise the benefit of this. You need to plan and integrate your activity across a range of channels and ensure the design and experience of your website converts shoppers to customers.
At Summit we have been doing this as long as anyone; Summit was founded in the same year Google launched their first paid ad and we save our retail partners millions of pounds every year by getting them more from their marketing budget. Whether you want a partner to help you do this, or the technology to do it in-house, we can help. Get in touch with one of our team at [email protected] to find out more.