Opinion: What last year’s shopping trends point to for Christmas 2016

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What can retailers learn from how consumers shopped during the golden quarter to improve their proposition ahead of this year’s peak?

A month on from the Christmas season and as we recover from the festivities, retailers must reflect on what happened and determine the actions they might consider to achieve success in 2016.

Although spending was up, Christmas was tough for many retailers and it wasn’t just a result of the unseasonably warm weather.

Clear trends are beginning to emerge, which could well be a preview of the future of retail.

Online shift

Online shopping continued to grow and customers were more sophisticated in their habits, proving harder to predict. In fact, ecommerce captured most of the spending growth, rising 7.4% in December versus just 0.1% for physical stores, according to Visa.

This trend was magnified on Black Friday which saw relatively low footfall in stores and the majority of sales conducted online.

The magnitude of this shift online wrong-footed some retailers, who had increased the number of employees in stores to cope with a demand that simply wasn’t there.

Instead, the additional resource should have been invested in supporting customer fulfilment and customer contact through multiple channels.

Differentiation

Retailers did get some things right, however. In 2014 retailers struggled to cope on Black Friday and many websites couldn’t keep up with the demand and crashed.

“With competition in the retail sector becoming fiercer than ever, delivery is one of the few opportunities retailers have to differentiate”

Matthew Prebble, Accenture

In 2015, the majority of retailers did a good job of taking the orders through different channels but many still struggled on the delivery promise.

With competition in the retail sector becoming fiercer than ever, delivery is one of the few opportunities retailers have to differentiate.

This became apparent over the Christmas period as the winners were those who had invested in flexible supply chains, technology and data.

The investment meant they were better able to sustain customer satisfaction through the different stages of the customer journey.

Looking ahead

Data and analytics are key to success. By using customer insights, retailers can craft compelling offers, forecast more accurately and enhance the customer experience to drive loyalty.

Retailers must consider their shape of the supply chain in 2016; optimising store portfolios and retail space.

As online shopping continues to increase, it is important to review store layouts and locations to ensure they are best placed to generate sales and meet customer expectations as well as optimise the cost base.

For a prosperous Christmas in 2016 – as well as great product – retailers should focus on meeting the delivery promise, improved forecasting through analytics, and becoming ‘digital on the inside’ to avoid falling behind in what is an increasingly competitive market.