By Ellie-Rose Davies, Content Executive, IMRG
It is now time to unbox the trends seen during Christmas 2023. Read on to discover all the latest IMRG insights and digest the latest information from industry experts to help you benchmark your performance and build a strategy for successful Christmas trading in 2024.
December results revealed
To see December results across a wide range of metrics, check out IMRG’s Digital Dashboard.
IMRG predicted online revenue growth for December 2023, but against the expectation of +1% YoY, the industry average was -0.4% YoY.
The last positive result for December was recorded in 2020 (+33.1% YoY), revealing that the industry is struggling against pandemic highs. Yet, despite the decline, there was one stand-out week in December that brought positive growth, and that was the w/c 17th (+10.3% YoY). It is also important to note that this was the top performing week in all of 2023.
Product category performance in December
Across all categories tracked in IMRG’s Online Retail Sales Index in December, health & beauty came out on top, experiencing a +14.2% YoY uptick. Skincare (+23% YoY) was the top performing subcategory of health & beauty, and similarly, beauty (+16.1% YoY) saw substantial growth.
After 12 months of negative year-on-year growth, clothing managed to experience revenue growth in December (+1% YoY). This growth was primarily driven by w/c 17th December (+21.9% YoY), suggesting last minute shopping in time for Christmas.
Beers, Wines, and Spirits saw +3% YoY growth in December 2023, mostly because of the excellent performance recorded in w/c 17th (+78.8% YoY). The equivalent week in 2022 saw a decline of -24.6% YoY, revealing that the category is now in a better position.
Though it may have been the season for giving, gifting retailers experienced a decline in December (-0.4% YoY) against a sharp decline recorded in 2022 (-22.6% YoY). It is likely that economic turmoil in the UK has resulted in more cost-conscious shoppers who have altered their Christmas spending budgets.
Co-Founder and Chief Innovation Officer at Huboo, Paul Dodd, found that ‘For many ecommerce brands, peak season began slowly but ended up outperforming expectations as momentum built and shoppers showed up with belated gusto.’
He says, ‘In the end, year-on-year performance across our client base was 16.3% up on 2022, with the toys & games, home & living, fashion & accessories, technology & electrics, and sport & fitness categories all seeing significant growth.’
Therefore, there are examples of retailers who experienced a good result. In particular, Paul notes that ‘Sustainability-oriented brands appear to have enjoyed a particularly positive peak season, suggesting that a prolonged cost of living crisis hasn’t diminished customers’ eco sensibilities.’
Heath Barlow, VP EMEA at Emarsys, shares some interesting insights concerning the split in customer spending. He exclaims, ‘SAP Emarsys Customer Engagement’s research on 2023 Christmas and Boxing Day spend suggests that the average consumer spent £551. This was split between £350 on gifts (mainly chocolates (18%) and clothing (16%)), and £221 on festive decorations, food, and drinks.’
Heath argues for a data-driven omnichannel approach owing to how ‘personal and diverse gifts can be.’ He says, ‘To genuinely pre-empt what consumers want from gifts and the holiday sales, brands should use customer data to identify the right products and offers to them, and should broadcast that unique package to them, no matter their chosen device.’
Post-purchase insights from December
Offering excellent post-purchase customer experiences is essential to protect margins. From clear insights to the handling of delivery, and all the way until the making of a return, there are opportunities for effective communication that could inspire a customer to purchase from a retailer again.
Founder and CEO of parcelLab, Tobias Buxhoidt, says ‘A key takeaway for retailers is the crucial role of the post-purchase experience in maximising sales during Christmas and Boxing Day of 2024.’
Tobias focusses on the value of ‘not only offering great deals’ but having, for example, ‘clear communication on order status, timely and transparent shipping updates, and a hassle-free returns process.’
He describes how ‘Enhancing these aspects can significantly increase customer satisfaction and loyalty, encouraging repeat purchases and positive word-of-mouth,’ and encourages retailers to ‘Remember that the sale isn’t over until the customer is fully satisfied.’
Also raising the value of a good returns process is Nick Williams, Director of Parcel Services at PayPoint plc, who says, ‘our Collect+ network processed 8.47 million parcels throughout December, demonstrating consumers continued reliance on local and convenient ways to send and receive gifts, especially around busy times like Christmas.’
Though, ‘Inevitably, some gift choices didn’t quite hit the mark as 1,347 people used their local Collect+ service to make a return on Christmas Day itself.’ Nick continues, ‘It’s not just easy delivery, but also simple return processes which are integral to the post-purchase experience.’
Sean Sherwin Smith, Product Director Post-Purchase at nShift provides some interesting insights as he exclaims, ‘nShift conducted an analysis between Christmas and new year, looking at which day of the week carrier companies were alerted of the need to collect an item.’
He says, ‘We found that, for the second year in a row, the Wednesday (27th) after Christmas Day was the most popular day for people to begin the process of returning unwanted gifts – a trend referred to as ‘Returns Wednesday’. Across the UK, Netherlands and the Nordics, returns were up almost 25% compared to the same day the previous year.’
‘Handling returned items can cost retailers as much as 50% of their profit margins.’ However, Sean tells retailers to ‘not fear the revenue impact of returns’ because, done right, ‘they are an opportunity to retain revenue, build customer loyalty and create upsell opportunities.’
Do you want more of the latest ecommerce insights? Then keep up to date with IMRG’s events, reports, and blog posts.
Published 19/01/24
