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Growth in pre-Christmas online sales proves faith in fulfilment

Retailers are reporting a boost in online sales in the days running up to Christmas, proving customers are more trusting of retailers to deliver goods in a timely manner.

Speaking at an IMRG Capgemini retail roundtable in London on Thursday, New Look and Notonthehighstreet both said they had a surge in sales very close to Christmas – an increase from previous years.

Sally Heath, eCommerce director at New Look, said this was due to customer confidence around deliveries. "Customers trust we will deliver right up to that last moment," she explained.

Heath said in previous years online sales would begin to drop off around mid-December and in-store sales would then pick up as customers would visit stores to ensure they had their goods in time for the big day.

Lorna Perrin, customer marketing director at Notonthehighstreet.com, said: "The week before Christmas was phenomenal – we had a surge in sales. Customers were confident in our deliveries and express service and we offered orders up until the 23rd to get them in time for Christmas."

The latest figures from the IMRG Capgemini e-Retail Sales Index reported online retail sales over the Christmas period (1 November – 26 December) hit £24.4 billion – a 12% increase year-on-year.

Meanwhile, total online retail sales increased 11% year-on-year, equating to around £114 billion spent online. IMRG and Capgemini forecast a further 11% growth will occur in 2016, with total e-retail sales estimated to be worth £126 billion by the end of the year.

Black Friday

The Index also noted how the greatest concentration of sales during the Christmas period (17%) took place during the week of Black Friday, with online sales increasing 62% on the previous week and shoppers spending an estimated £4.3 billion on discounted goods. This is a significant increase on the 44% growth recorded in 2014, and 20% in 2013.

New Look's Heath said in 2014 all retailers' Black Friday forecasts were "off-kilter", but the industry was much better prepared for 2015.

"But the post-Black Friday impact affected stores this year, with huge queues to collect online goods," she added. "In my personal experience, customers spent more time queuing to pick up a parcel than going in to buy it. But there is a connection, at New Look we see 20% of online customers buying something else when they pick up a parcel in store, but I'm not sure whether they do when they have to queue for so long.

"That's why we need to phase the [Black Friday] demand, rather than just one weekend, so we can provide great service to our customers."

Nigel Richards, managing director at Brora, noted how retailers are split when it comes to Black Friday. "There is a divergence of retailers who will still need to use Black Friday to discount, but the niche retailers need to pull away from that and protect their brand for the long term otherwise you're educating your customers to wait and buy it at a cheaper price."

Neil Sansom, chief executive at Woolovers, agreed that Black Friday and discounting varies by retailer. "For electricals it is a key trading point and you have to be part of the mix, but if you're a luxury brand it's different. We did partake in Black Friday and saw a positive uplift for not a huge discount."

The roundtable of retailers agreed that shoppers are becoming savvy to the Black Friday date in the run up to Christmas waiting for the savings. Combined with further pre-Christmas discounting, retailers are struggling to decide whether this is the right thing to do. "The worst thing, is if a customer has a present wrapped under the tree and thinks 'actually I'll unwrap that and take it back to get the discount'," explained Richards.

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