Festive shopping in review: what did we learn from Christmas 2020?

By Ben Sillitoe

The divide between fashion and the rest of retail, and online players and multichannel operators is clear to see in the festive trading results announcements of the last few weeks.

Asos, AO, Boohoo, and The Hut Group are among those reporting a Christmas cracker of a performance, while the likes of Matalan, WHSmith, Superdry and Primark’s end of 2020 resembled more of a deflated party balloon, as total sales slid year on year. The major grocers, as ever for the time of year, grabbed a plateful of industry market share.

Although there were exceptions to the rule (Seasalt with a huge leap in online and international sales to make up for sales lost due to store closures, is a fine example), generally speaking longstanding pandemic patterns played out at Christmas time. The closure of non-essential retail and travel restrictions meant most multichannel fashion players were flat at best, as homeware and food retailers picked up more custom.

Pure-plays in the online fashion space showed there is still money to be made from clothing, accessories, and footwear if a suitably attractive offering can be implemented.

Online as a whole, was a much bigger part of Christmas shopping. But, I guess, that came as a surprise to nobody, considering the current circumstances.

Online intensity

Scott Lindsay, head of marketing for the EMEA region at eShopWorld, a cross-border eCommerce platform provider, says: “Peak season is always an intense period for eCommerce brands, but never more so than in 2020.

“Following a pandemic-inspired move toward eCommerce, with more demographics shopping online than ever before, brands have reported higher than ever sales across most of the year, and peak season was no exception.”

IMRG data indicates online retail sales growth in December was up by 37% year on year, helping to cap a standout year in eCommerce, when online retail sales jumped by 36% overall to record their highest annual growth since 2007.

Barley Laing, UK managing director at Melissa, which helps retailers verify addresses and contact details online, adds: “Not surprisingly those with a strong eCommerce and multichannel offering will have been in a strong position to drive revenue over the Christmas trading period.

“Purchases online accounted for up to 70% of sales at John Lewis in 2020 – the first time more than half their sales have been online.”

The shift towards a more digital shopping experience was not solely due to the enforced lockdown store closures in November and December, which particularly negatively impacted retailers dubbed ‘non-essential’ by the UK government.

Bren Standell, commercial director for parcel locker solutions at Quadient, cites his company’s research about consumer purchasing intentions, saying: “Even before details of the second lockdown had been announced, roughly 50% of UK shoppers were planning on doing most of their Black Friday shopping online.”

And Andrew Gough, vice president of sales at HelloDone, a conversational commerce technology company, comments: “With the big increase in volumes and heightened anxiety of the pandemic, the most forward-thinking, digitally-savvy retailers were looking at their customer experience beyond the buy button this Christmas, to find new ways of engaging and helping their customers with home deliveries and returns.”

Celebrating successful online sales during peak season should be done with a degree of caution, though, according to Tracy Cray, director of card scheme compliance at Chargebacks911, a chargeback management company.

“Year after year, we see it happening – around 60 to 90 days after a peak sales event, consumers will begin to dispute their transactions,” she warns.

“Some claims made will be genuine, resulting from criminal fraud or merchant error, but others will come from consumers who perhaps indulged too much over Christmas, drawn in to the abundance of one-click checkouts and such. Then will roll in the false claims.”

This “chargeback lag” for 2021 is likely to see one of the biggest on record, Cray adds, due to the combination of a sharp rise in online transactions, buyer anonymity, supply chain issues, and non-contact deliveries.

Payment Transaction

Standout performers and future success

Gough labels luxury fashion retailer Farfetch a top performer at the end of 2020, and says the company is now exploring the use of conversational artificial intelligence technology across popular social media messaging platforms in regions such as the Middle East, to create a more personalised customer experience and improve delivery.

Brad Houldsworth, head of product at Remarkable, an eCommerce platform provider, says WoolOvers, Roman Originals, and Pragnell were standout performers online among his company’s client base.

Suggesting key factors for retailers to put in place for future success, he lists “a reliable, yet flexible integration between your commerce platform and your couriers” and “a marketing stack which enables personalised, current and regular comms with your customers”.

That strong link with couriers is crucial, according to Marc Jiggins, director of client management at carrier Yodel, which delivered 37.4% more parcels during November and December 2020 than in the same months in 2019.

“The key to successfully dealing with this volume of parcels was planning and communication; realistic and honest communication from retailers to consumers; and likewise, honest communication from carriers about the capacity of their network,” he argues.

“This ensured that consumer promises could be managed appropriately.”

Another factor driving success for retail right is being a good citizen, according to Alecxa Julia Cristobal, marketing content writer at digital payments provider AsiaPay.

Morrisons has gained plaudits for being quick to offer services and systems that benefit the most vulnerable in society in times of a health crisis, while people won’t forget the likes of Burberry, which pivoted operations to support the pandemic response.

Burberry switched its trench coat factories to making gowns for the NHS during the start of the Covid-19 crisis, and it also helped fund the Oxford-AstraZeneca vaccine, which in my view supersedes the 40% year-on-year sales dive it experienced in the 13 weeks to Christmas in terms of newsworthiness.

“Brands that are supporting those in our community who need help during these difficult times can increase their advantage of getting a loyal consumer base,” Cristobal suggests.

For eCommerce platform provider, BigCommerce, brands who succeeded at Christmas were able to outperform in three key areas: shipping and fulfilment; marketing and search engine optimisation; and the online customer experience.

“With heightened customer expectations, leading brands needed an innovative eCommerce platform to offer a world-class experience,” notes a BigCommerce spokesperson.

IMRG data shows there were significant sales seen in electricals during the festive period, with online trading up by 116% year on year. Gardening online sales were also strong for December, growing by 165% compared to the same month one year before.

While these figures rounded off an extremely successful year for both categories, December online fashion sales growth of 3.2% underlined a poor year for the sector in general, which was up by just 1.3% compared to 2019. IMRG figures show footwear was particularly hard hit, down by 5% in December and plummeting by 10.8% in 2020.

Online Shoes

Summary

All in all, though, amid fears of a disastrous festive period due to shop closures, Brexit concerns, and worries that people would rein in their spending, the retail industry held up pretty well at the end of 2020.

Rory O’Connor, founder & CEO of Scurri, a delivery management software company, the 2020 Christmas period showed “necessity is the mother of all innovation”.

“When faced with sinking or swimming, retailers chose to swim,” he says.

“They opened pop-up eCommerce distribution hubs to meet demands, they pivoted businesses online, and they reshaped offerings to align with consumer attitudes. While 2020 was a hard year for retailers, they proved resilient during the Christmas season.”

And in terms of what it means for next year? The last word goes to Christophe Pecoraro, managing director of PFS Europe, an eCommerce solutions provider, who thinks peak will never be the same again.

“Brands and retailers had to completely change their approach to promotions in the lead-up to the 2020 festive season, resulting in an earlier and longer peak season,” he explains.

“Instead of your usual Cyber Week activities, eCommerce saw the roll-out of ‘Black November’ as a result of the closure of bricks-and-mortar stores and the high street, as we know it, remaining eerily quiet. Many of the early deals were implemented to flatten the demand curve and better manage the sudden influx of increased order volumes.”

Pecoraro adds: “This is likely to be a trend that we see continue, as eCommerce and a digital-first approach to retail becomes more prevalent in 2021 and beyond.”

By Ben Sillitoe

Published 27/01/2020

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