The government is priming the public to expect Christmas to be a little different this year, as Covid-19 infections prove difficult to keep under control.
Most of us understand that this is likely to mean a smaller family gathering for Christmas lunch, a year off from big Christmas parties, and almost certainly no kissing under the mistletoe. But as shoppers start making their lists for the Christmas Day turkey with all the trimmings and presents to sit under the tree, they will also be preparing for a different Christmas shopping experience from normal.
Accenture’s UK Holiday shopping survey suggests that more than one-third (36%) of UK shoppers plan to tighten their belts and spend less this Christmas – more than double those who planned to spend less at Christmas in 2019 (13%). Meanwhile, shoppers are turning to online for their Christmas shopping as the threat of the virus lingers and enforced lockdowns close many of their go-to gift shops. According to Accenture, 80% of shoppers plan to shop online this Christmas, which will increase pressure on retailers’ fulfilment networks, as well as their margins.
“There is clearly a challenge for retailers to get their biggest share of consumer spend this year because there is a smaller pie to go after,” says Andrew Carlisle, Accenture retail consulting lead for UK and Ireland. Retailers will have to work hard to engage with customers and tempt them away from competitors, but they must also have the technology infrastructure in place to ensure they don’t disappoint shoppers ahead of the big day, he adds.
“As volumes shift to digital, home delivery and click and collect, the ability to fulfil those customer promises is critical,” says Carlisle.
And the stakes are high – 57% of consumers will not shop with a retailer again if they are let down this Christmas, but 40% of shoppers have incredibly high expectations of fast and free deliveries.
“It’s the Amazon effect – the expectations of delivery have shifted,” says Carlisle, pointing to the beginning of the pandemic, when lockdown resulted in huge e-commerce delivery delays. “Back in March, a couple of weeks didn’t make a big difference, but there’s a definitive deadline now and we’re already at a time of the year when the delivery network is stretched to breaking point,” he says.
As England’s second lockdown draws to a close, we take a look at how retailers have been innovating in order to engage shoppers during this critical golden quarter:
1. Getting the basics right
Along with ensuring that delivery networks are capable of meeting the expected heightened demand as we approach Christmas, retailers really need to have clear communications with shoppers about delivery cut-off times for orders to arrive in time for Christmas. Carlisle says he is seeing many retailers, such as Aldi, rush to extend their click-and-collect infrastructure so that shoppers who miss the last delivery slot can still pick up their orders from a store in time for Christmas Day.
He also points to retailers, including Next and B&Q, who are being very clear on their websites about their store opening times and policies. With varying degrees of lockdown around the UK, this information will be critical to Christmas shoppers.
2. Innovative marketing
Thankfully, Covid-19 has not stolen the ritual of the Christmas advert, with various retailers dropping their ads in recent weeks. The much-awaited John Lewis advert was nearly scrapped for 2020, with the retailer thinking a charity donation would be more appropriate. Instead, it scaled back its production costs and made its ad about community and acts of kindness, encouraging the public to give to one of its charity partners.
Retailers have also put a lot of effort into their loyalty schemes in the run-up to Christmas 2020, with gamification being a major trend. Marks and Spencer is using its Sparks loyalty scheme to remind customers of its personal shopper appointments, encouraging customers back in store with 1,000 £250 M&S gift cards up for grabs. Meanwhile, Currys is offering shoppers a one in 20 chance to win half of their money back when buying a specific product, and TK Maxx is offering prizes for its “Treasure” loyalty reward customers.
3. Spreading out Black Friday
Black Friday seems to start earlier and earlier each year as retailers try to level out the demand on their systems and stores by spreading the US-adopted shopping holiday from one day to, in some cases, weeks. But this year, with a smaller share of consumer spend up for grabs, it has never been so important to ensure that websites and fulfilment networks don’t buckle under the strain. Tesco, Dixons, Very, Boots, Superdrug and The Body Shop are a few of the retailers to get their Black Friday sales going well ahead of 27 November.
Accenture’s Carlisle says: “If you can get a customer to buy now, it takes the pressure off the delivery network. The one thing that lockdown 2.0 has helped with is that consumers have a bit more spare time and one of the things they do is go online and shop.”
4. Curation and gift support
As more and more shoppers are browsing and buying gifts for Christmas online this year, retailers need to have a clear online narrative and curation of products. While Amazon is famous for its algorithm which shows customers products based on their previous buying behaviour, this is one area that Carlisle is worried other retailers have not innovated enough in. “This discovery piece and recreation of the physical and human experience in store is critical to help customers select the right gift,” he says.
But there are some good examples already out there:
John Lewis has created an online version of its Christmas shop at its Oxford Street store using cameras and tagged products – virtual reality technology that has truly come into its own when stores have been forced to shut under lockdown restrictions.
Meanwhile, Dixons Carphone is one of a number of stores to roll out video technology to connect online shoppers with in-store staff to allow them to view demonstrations of products from the comfort of their own home.
Lush, on the other hand, is engaging with shoppers at the check-out stage by giving them the opportunity to create their own custom box for their gifts. Desktop and mobile web shoppers will be able to design their box with a message using 3D technology, with the solution to be made available on the retailer’s recently updated app in the new year.
Carlisle advises retailers: “It may be too late, but if there’s an opportunity in the next six to eight weeks, it will be for retailers to work on the curation of their products on their website – help customers find the right gift and structure the process to make it easy.”