The IMRG and the Centre for Retail Research have both produced figures suggesting a fast rise in ecommerce sales in the run up to Christmas. But the Centre for Retail Research suggests that while online sales will grow quickly, shoppers may spend up to £9bn less than they did last year, primarily as a result of this month’s lockdown.
The figures come as England goes into its second lockdown – which will be in force on Black Friday as it runs until December 2. As things currently stand, none of the other UK nations will be in lockdown for Black Friday. But even before the lockdown, the expectation was that growing that more people would do their Christmas shopping online this year. In light of that, both the IMRG and the British Retail Consortium have asked shoppers to buy earlier for Christmas this year, if they can.
Black Friday
Etail trade association the IMRG says that sales will grow by between 35% and 45% on November 27 – Black Friday – compared to Black Friday 2019.
That expectation is reinforced by IMRG figures that show ecommerce has already grown by 34.9% in the year to the end of October, compared to the same time last year. A year earlier, online sales had grown by 6.7% on the previous year.
Andy Mulcahy, strategy and insight director at IMRG, said: “We were anticipating a huge surge online this peak, and circumstances have conspired to ensure that is the case; the stores are closed, furlough has been extended and shoppers are being advised to get the bulk of their Christmas shopping done before December. There is a possibility that could mean people spend more in the early weeks of November, pulling some of the volume away from the Black Friday week – that seems the only realistic reason why the online spend for that period could come in lower than +35%.”
IMRG is tracking 320 retail sites through Black Friday 2019. It has found that some retailers already have their Black Friday campaigns underway – of which some are set to last all month. On November 4, 4.3% of 320 retail sites that the IMRG is tracking had live campaigns around the event. On the same day last year, only 2.3% did so.
Justin Opie, IMRG managing director, said: “This year’s huge growth rates, and the expected online bonanza the Black Friday period will deliver, underline retail’s rapid structural shift online. This does not feel like a temporary development; further evidence is no longer required that this is a permanent shift. Retailers, including those with stores, with strong online propositions, will continue to trade well. Those without, for whom it’s not already too late, must adapt now if they are to survive.”
Research from Periscope by McKinsey, meanwhile, says shopper behaviour has changed as a result of Covid-19 lockdowns. Nonetheless, the study still expects shoppers to buy on Black Friday. When it quizzed shoppers around the world it found that 55% expected to take part in Black Friday, followed by Amazon Prime Day (43%), Cyber Monday (39%), pre-Christmas sales (38%) and Singles Day (26%). In the UK, only 75% say they will spend the same or last as last year during holiday sales events – rising to 90% in China, and 89% in Germany. That could be as 26% of shoppers say they have seen their income reduce either slightly or significantly.
Peak Christmas trading
The Centre for Retail Research has recalculated its Christmas spending figures, produced for vouchercodes.co.uk, in the light of lockdown. It now says that shoppers will spend £73.4bn in the six weeks leading up to Christmas – 11.6% or £9.6bn less than at the same time last year. Before the lockdown was announced it had expected sales to rise by £1.3bn on last year. The drop in the prediction comes because non-essential shops will be closed, because of consumer fears for the future, and as a result of logistical problems that online businesses will be likely to face as they try and cater for increased demand for gifts that would previously have been bought in shops - such as electronic goods, children’s toys, clothes and footwear.
It also expects that almost half of retail sales (48%) will take place online in the six weeks from November 22 to December 26, growing by £12.98bn or 58%. Shoppers are expected to spend an average of £1,049.01 each.
In-store shopping will account for 52% of sales, it predicts, as offline spending drops by 37% – or £22.6bn on last year. That’s because some sales will take place in shops that are open, including supermarkets and pharmacies.
Anita Naik, lifestyle editor at VoucherCodes.co.uk, said: “The pandemic has without a doubt interrupted ‘normal’ life for everyone this year, so it’s no surprise that it will also affect consumer spending over the Christmas period, particularly now that shopping in-store will not be possible until much closer to Christmas.
“With physical stores closing and people staying at home for at least four weeks, the rapid shift to online shopping is to be expected. Consumers have already started shopping for Christmas to ensure they don’t go without, and non-essential stores have been busier than they were in the run up to Christmas 2019.
“However you choose to shop, it’s worth taking into consideration that retailers will be offering extra special discounts during the Black Friday period and in the run up to Christmas, so make sure you shop around for the best deals. It’s also worth remembering that stores will be trying to fulfil much higher demand than usual online, so make sure you shop early so all your gifts arrive in time.”
via https://AiUpNow.com November 9, 2020 at 03:36AM by Chloe Rigby, Khareem Sudlow,
