Online Shopping and High Street Stores - What Retailers Can Learn for Christmas 2015

Written by Intern - 16 Jan 2015

Non-food ecommerce growth took a hit this December, according to new figures, as crowds flocked online to bag a Black Friday bargain displacing Christmas spend to November.

Retail sales figures from industry trade body the British Retail Consortium (BRC) revealed this week:

  • Online non-food sales increased 9% in December 2014. This is down on the previous year when online recorded storming sales of 17%, and down on 2013 when they surged 16%
  • The overall performance was even more disappointing, with like-for-like sales growth across online and stores down 0.4% on the previous year – its lowest growth since December 2008

Online Christmas shopper

Retailers have complained that Black Friday (28 November 2014)  is to blame, bringing Christmas sales forward to the end of November. John Lewis chief executive Andy Street revealed that, for the first time, the retailer’s sales peaked with Black Friday rather than the week before Christmas.

And some retailers struggled to meet the huge spike in online demand as shoppers spent around £810m on Black Friday and £720m on Cyber Monday (December 1). Online fashion giant ASOS’ website crashed under the pressure, while Marks & Spencer’s Castle Donington online distribution centre failed to cope, resulting in a 5.8% online sales slump over Christmas. 

A YouGov and JDA survey found that of 2,400 UK adults polled, almost a third experienced issues with an online order over Christmas, up from one in five the previous Christmas. Of those issues:

  • 49% suffered late deliveries
  • 45% of complaints were due to late or never received goods

And there were scenes of shopping chaos in Asda supermarkets.

Clicks and bricks not clicks vs. bricks

Maybe it isn’t so much of a surprise then that some stores experienced a boost this Christmas. Booksellers Waterstones and Foyles both revealed a trend for customers returning to stores to browse physical books at Christmas rather going online. Foyles said online sales had slowed this year compared with 2013, while Waterstones reported physical book sales increased 5% in December. In fact, as a result of these additional sales, the bookshop chain is planning on opening more stores.

Despite online sales growth slowing in December, online remains huge for retailers. IMRG Capgemini e-Retail Sales index revealed in January that online sales exceeded £100bn for the first time in 2014, up 14% on 2013 to £104bn.

And many retailers performed well over Christmas with plenty benefitting from Black Friday. House Of Fraser said its 31.2% online growth was helped along by Black Friday, while online electricals retailer’s online sales jumped 38%.

But online retail is also certainly benefitting from a physical presence as more retailers use click-and-collect. Predictions of a click-and-collect Christmas were fulfilled, as online fashion group Shop Direct reported a 112% surge in the number of orders delivered via Collect+. Meanwhile, John Lewis said online sales grew 19% with click-and-collect overtaking home delivery for the first time. Finally, Debenhams reported online sales up 28.9% in the four weeks to 10 January 2015, with click-and-collect peaking at 38% of online orders in the final days of Christmas.

And December footfall figures released this week from the BRC support this trend towards a resurgence on the high street, revealing the best performance since January 2014.

How can retailers get the best of both worlds?

It seems that when it comes to bricks vs. clicks it is actually bricks and clicks, or multichannel, which continues to be the best way forward for retailers.

Use click-and-collect

The service enables customers to shop online but provides a further sales opportunity by drawing them in-store to pick up the goods, exposing them to more products once again.

And online retailers are realising the need for a physical presence, often using click-and-collect to get around this. Online fashion giant ASOS, has teamed up with click-and-collect store network Doddle, which are now popping up in train stations across the country. The sites allow customers to pick up their online orders and try them out before taking them home. They can also return the items there and then if needed, giving customers some physical contact with the retailer.

Amazon introduced Lockers at convenience stores around the UK a few years ago to enable customers to have reliable access to their orders, and last year revealed it is installing the lockers in London underground stations.

Click-and-collect also eases pressure on home deliveries, so there shouldn’t be so many failed deliveries across Black Friday next year.

Pop up shops for online retailers

Auction site eBay has experimented with pop-up stores in recent years with a store on Oxford Street. Since then, it has teamed up with Argos to offer click-and-collect, so customers can collect orders from special eBay-signposted points. Meanwhile, it was reported last year that Amazon is thought to be opening its first ever physical store in the US.

Stores as showrooms

Retailers have long noted that some shoppers use stores to look at the physical product only to then go home and transact online. This can be the case particularly with electrical items where shoppers compare price across online and physical players. But this should be seen as a positive attribute – often shoppers still want to feel or try a product before making a purchase.

Make stores an experience

Jigsaw Duke Street Emporium

Jigsaw's Duke Street Emporium

Retailers have been working hard to make shopping in stores more of an experience, training up staff to improve product knowledge and customer service, while providing shoppers with a more inspirational experience. For example, car parts and cycle retailer Halfords refitted its stores to provide more theatre, so kids can test drive bikes and customers can watch staff working on bike repairs. And fashion retailer Jigsaw opened its Duke Street Emporium in London last year, featuring a coffee shop stocked with books and space to host artists and exhibitions, as boss Peter Ruis aims to create a ‘meeting place’.

This retail theatre can also include installing in-store tablets, so customers can order online from within a store, again marrying the two channels.

Invest in a robust online and fulfilment service

M&S proved how important it is to have a solid online delivery network. The YouGov and JDA survey demonstrates there is a lot of room for improvement when it comes to missed deliveries, which is extremely frustrating for shoppers and will mean the online channel losing out to the immediacy of in-store.

And it seems Black Friday is here to stay, no doubt becoming an even bigger shopping phenomenon next year. Retailers will have to iron out any fulfilment issues to make the most of the spending splurge.

And so, retailers must know their limits. Good customer service is crucial in such a competitive retail landscape and it is not a great message to shoppers if goods are delivered late or not at all. Make sure if you are promoting a service or an offer, you can fulfil your promises.

Plan your marketing budget

Will your business be taking part in Black Friday next year? If so, you will need to plan where to spend your marketing budget carefully, as this could mean the need for more cash to cover both Black Friday and Christmas. In terms of marketing, it’s important to understand your audience and work out where the noise is being created. For example, does it make sense to invest in creating content if news articles are going to eclipse you on search results?

And similarly, if shoppers are discussing purchases on Facebook, could it be that you need to up your social media presence at this time?

Indeed, it may not be necessary for every retailer to take part in the Black Friday frenzy, which seems to be best suited to electrical items. Fashion retailer Fat Face actually refrained from participating in price cuts and no doubt protected margins, as well as reporting a 25% jump in online sales over Christmas.

Invest in m-commerce

Despite the rapid growth of mobile commerce, which accounted for £8bn of sales over Christmas, according to IMRG Capgemini, just 66% of retailers operate a mobile-optimised site.

This shows that, although more and more retailers are introducing responsive websites that automatically respond to varying browser sizes to deliver a fully optimised website, the sector as a whole still has a way to go to meet the demand of mobile searchers.

And, although businesses have been aware of it for a while, the need for a mobile-friendly site is something that still cannot be understated - particularly with Google’s introduction of mobile-friendly tags to its SERPs.

Need your own responsive website? Find out about Fresh Egg’s approach to responsive and mobile-friendly websites over at our web design and development page.

If this post has got you thinking about the future of digital marketing and what it may hold, check out our blog post - 27 Digital Marketing Trends for 2015: Our Predictions - to find out what some people in the Fresh Egg team predict for 2015.