Posted: Tuesday 2nd February 2016 in Retail Strategy, Thought Leadership.

Republished from Retail Week, 21st January 2016

The BRC’s latest figures show that consumer spend has continued to move online – how can retailers adapt to this trend in the year ahead?

With data from the British Retail Consortium revealing that one in every five pounds spent in December was done so online, retailers who overlook the importance of their ecommerce offer performing efficiently risk huge losses.

Online has never been so critical to business performance.

As with every set of Christmas sales results there are winners and losers – and this year’s biggest successes all point to online sales as a main factor.

There is no doubting the power of mobile. We looked at five big retailers during the Christmas period and found that desktop sales fell by around 10% year on year, whereas mobile grew 15%.

John Lewis is a great example of a retailer taking mobile seriously, seeing its sales via smartphones and tablets increase over 30%.

The department store group has worked hard to ensure that its ecommerce proposition is mobile-led, capturing customers on the go. In Christmas 2015, mobile was king.

Specialist retail vs the one-stop shop

Last year was also about the battle between specialist retailers and the one-stop shop.

An interesting example of this was Game, which reported an 11% fall in sales, despite offering a number of online incentives, such as free delivery.

Game said there was slower uptake of gamers switching to the new Playstation 4 and Xbox One consoles than expected, impacting sales. However, John Lewis reported that gaming product sales soared 246% around Black Friday.

Are consumers looking for more of a one-stop shop in order to complete their online shopping? Or is it that a Game customer is likely to purchase only the newest and most anticipated releases, whereas John Lewis attracts the more general buyer?

Retailers need greater understanding of their customers’ online purchase behaviour in the year ahead – what they buy, when they buy it and what incentivises them to buy.

Customer behaviour is constantly evolving, as we can see from data each year, and it is therefore difficult for retailers to predict what will happen. Understanding an increased number of buying triggers will help with this.

Adapting to behaviour

However, this might not be enough and, to reflect this, retailers need to have the infrastructure to be flexible and make last-minute changes that adapt to consumer behaviour, rather than miss out on purchases.

Previous festive seasons have put retailers in a spin, with many failing to anticipate the high level of demand.

Huge losses have been a result of websites crashing under the strain of Black Friday and the overall seasonal peak.

But we now have the tools to be much more sophisticated in our approach.

By spreading out the deals in 2015 – and therefore moving away from a single day of peak – retailers avoided unnecessary strain and could instead manage customer purchases more effectively.

Argos is an example of this, deciding to run deals across 12 days rather than focusing purely on Black Friday off the back of customer research findings.

Across channels and sectors, retailers need to ensure they get the basics right. It may seem difficult to predict long-term consumer behaviour due to the current market, but we do know that shoppers will always favour a retailer that is easy to buy from.

It is critical to ensure this is the case across all of your channels and that you have the logistics to be able to deliver, as well as being flexible to consumer needs.

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