Comment: What we learnt from Christmas 2015

According to the BRC-KPMG Retail Monitor, UK retailers experienced a disappointing Christmas with total sales up only 1% from the previous year. However, closer inspection reveals that it was not all bad news with many fashion retailers boosted by the success of their online and omnichannel offers. 

Beginning with Black Friday 2015, it's evident that many learnt from their mistakes in 2014 and attempted to spread the peak by extending promotions over the course of a week. In spite of this, consumers steered clear of potential queues and crowds on the high street to secure their bargains online. This set the trend for a Christmas period punctuated by low footfall in-store and a strong increase through online, mobile and click & collect sales.

Debenhams reported its best Christmas trading period ever with a 36% increase in online sales compared to a total increase of 3.7% – customers also responded well to its click & collect offers with almost half of online orders picked up in-store as it edged closer to Christmas. White Stuff reported an overall 20% increase supported by international expansion and a strong multichannel proposition – its online store increased by 40.9% with mobile commerce accounting for two-thirds of the sales mix.

Similarly, Burberry reported growth in mobile, with the channel now representing the majority of traffic to its website. Ted Baker, John Lewis and Mothercare also experienced strong results from their online stores with increases of 39%, 21.4% and 11.7% respectively.

So what have we learnt from the results of 2015?

As a newer shopping channel it's not surprising that online consistently garners double digit growth. But while online sales are forecast to further increase at a cost, physical stores will maintain the majority sales mix with the Centre for Retail Research predicting online sales will account for one-fifth of total retail sales by 2018.

To increase the overall size of the retail pie we need to look at the successes of online and how eCommerce functionality can be further interpreted for the physical store. Consumers continue to respond to the speed and convenience afforded by eCommerce. Online represents a quicker, easier and arguably more enjoyable shopping experience so – as omnichannel continues to develop – how can we further align the online and in-store experience?  

1. Product visibility and real time inventory is key

Managing products across an omnichannel supply chain requires accurate visibility of all the items and activities within your business. To enable this many retailers are moving to item-level tagging through RFID. Rather than identifying a product, RFID identifies each instance of a product in your inventory and enables you to locate that particular product in real time.

The level of stock visibility enabled through RFID is vital in supporting omnichannel processes like click & collect. According to JDA's Christmas Pulse Report 2016 click & collect accounted for 41% of online purchases over Christmas 2015, however, almost a third of customers experienced issues with their orders. The issues related to inaccurate stock data and poor visibility over where stock and orders were held.

Beyond click & collect, retailers like Macy's, are taking item-level product information one step further by allowing customers to browse stores remotely. Through Macy's website customers can browse the inventory of their local store, they can then choose to purchase online or in-store – a great example of how retailers can use online to encourage shoppers to visit in person.

2. Improved checkout process

Whether you use mobile, contactless payments, self-checkout or have removed the cash desk all together – speeding up the physical checkout process is on the mind of most retailers. Checkout, as the last point of conversion in a physical store, is critical to service. As online checkouts advance to one button payments, like Amazon Dash, there's an even greater need for physical stores to catch up. Experts predict 2016 will see retailers introduce more options for payment and technologies that speed up the physical checkout process.

Whilst uptake of Apple Pay wasn't as successful as anticipated it's progressing at a steady pace, with 15% of Starbucks customers using their phone to pay for their morning coffee. RFID is also being used to streamline the checkout. The dream of RFID enabling customers to pay by simply walking through an RFID portal is still some way off, however retailers like Decathlon and Gerry Weber are using RFID enabled point-of-sale to speed up the process of scanning items at the checkout.

3. Using online data for in-store personalisation

Personalisation has been a key buzzword over the last two years with retailers using consumer data to offer a better online experience. This peaked in 2015 with launching the first ever personalised homepage. The next step is to connect this data to the offline world to support conversion in the physical store.

Using a cloud-based tool to collate customer data and provide a single view of their customer and their stock, Phase Eight has been successful in doing just this. The tool enabled store clerks to access the online customer journey for click & collect customers. When visiting the store, customers were offered a personalised experience with their 'wish-list' on hand and ready for the customer to try on. By offering this service 21% of click & collect customers left the store with an additional purchase. 

GS1 UK provides a regular column for Essential Retail focused on technology, in relation to retail industry standards and the wider supply chain.

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