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Published
Nov 13, 2020
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Surge in holiday online retail will see improved sites, more discounts says survey

Published
Nov 13, 2020

Digital retailers are upping their game for Black Friday Christmas, boosting capacity, improving their proposition and, of course, offering greater discounts, according to Capgemini’s annual holiday survey.


Retailers to focus on improving digital options and increasing discounts this Christmas - Archivo


And despite a 2020 of disappointments, over a third of UK retailers are still “cautiously optimistic” about the festive shopping season, the survey also said. But that does come with concerns around physical store openings and holiday sales patterns, of course.

Over a third (36%) of UK retailers expect an increase in sales this festive period – and, unsurprisingly, 51% of consumers expect to shop online more this holiday season than in previous years. By comparison, the preference for in-store shopping on Black Friday is set to drop from 39% last year to 28% this year.

In anticipation of this, 91% of retailers have taken deliberate steps to bolster their online offering. Some 47% have improved their website or e-commerce proposition, 37% have increased their web traffic capacity and 20% have introduced new virtual shopping experiences.
 
To further attract customers, 52% of retailers will offer greater discounts both online and in-store, while 31% plan to offer a larger range of discounted products online.

Meanwhile, 83% have introduced new delivery options this year, 44% have brought in free delivery and 37% have introduced click and collect, or kerb-side pick-up.

However, despite these preparations, retailers are less confident that they can accurately predict sales patterns this holiday season compared to last year (26% compared to 46% in 2019). The threat of lockdowns has been the leading cause of uncertainty for 62%, while 49% blame supply chain disruption and 29% say the data they base their planning on isn’t accurate due to Covid-19.

But retailers aren’t forgetting about the in-store experience. Some 94% have taken steps to attract customers to their physical stores, 60% have restricted numbers in their shops to ensure social distancing, while 44% have introduced more touchless payment options.

Capgemini’s pointed out that any new lockdowns will not mean these efforts have been made in vain, with restrictions due to relax in December in the UK, a late surge in Christmas shoppers could be more easily accommodated, it noted.
 
And what about spending patterns? Not so good here, with only 11% consumers expecting to spend more than usual this Black Friday, with 34% suggesting they plan to spend less. Some 44% cited less disposable income as the main reason. However, at least more affluent shoppers are expecting to spend more this year.

What could be a blow for fashion and beauty, the survey suggests consumers will prioritise essentials this year, but at least younger generations will be spending the most in a sign that clothing may at least get a boost with that age group.

More than a third (37%) of 18-24 year-olds and 40% of 25-34 year-olds say they have saved money since the start of the Covid-19 pandemic with the intention of spending it around Black Friday and the holiday sales period.

Consumers in higher income brackets are also more likely to spend more this year than previous years. Compared to a global average of 14%, 38% of those on a salary of £64,000 and above plan to spend more.
 
When it comes to what people are intending to buy, only 31% of all holiday season purchases will be for essential items. Consumers will prioritise essential goods for themselves and others (44%) over buying gifts (35%) or treating themselves (21%). However, luxury items – which only 18% of consumers plan to buy – remain in demand for younger age groups (27%) and those at higher income levels (34%).

For those consumers who are able to shop in-store, 33% will only go to stores when they know what they want to purchase and 32% will research what they plan to buy in advance, suggesting that impulse spending will fall.

“The holiday sales forecast for the UK is particularly complicated this year”, said Steve Hewett, VP, Global lead for retail customer engagement at Capgemini.

“National lockdowns have resulted in a large number of people building up savings, but 3 in 5 UK consumers we surveyed had no intention on using this on increased holiday spending. While it remains unclear just how much people will spend, it’s the changes around how people will shop that appear more certain.
 
He added: “The second lockdown will inevitably lead to further reduction in impulse purchases and will reduce demand in categories closely linked to business, leisure and entertainment. And with 50% of UK consumers we surveyed planning to make more use of online in the run up to Black Friday and Christmas – even categories where demand will be strong will face a tough fight to capture the attention and spend of customers that have shifted online through choice or necessity.

“Retailers that have managed to improve their online operations, who have put in place new technology and processes to provide better experiences online and in-stores and who have quickly grown their digital marketing muscles will be best placed to capture sales this holiday season, but will have also set themselves onto a stronger footing for the inevitably digital led shopping future ahead."
 

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