Retail trading conditions over Christmas 2022 are forecast to remain resilient, despite economic headwinds from inflation, supply chain issues, and interest rate rises, according to retail specialist, Brian Walker.
The news will be cautiously welcomed by retailers who usually turnover 30 to 40 power cent of their annual revenue – $58 billion nationally – during November, December and January.
“Optimistically, I think we will be there,” Brian, the CEO of Retail Doctor Group. says, citing high household savings and many being ahead on their home loans.
“There is money in the economy. Paradoxically, we have seen increased retail sales through the last quarter. However over the next three to six months we anticipate that people will tighten up and be more mindful of expenditure,” he says, adding that further unexpected rate rises may impact these forecasts.
“Interest rate rises have an inverse relation to people’s spending.”
|How retail businesses can stand out at Christmas:|
– Embrace the community
– Sharpen your Point of Difference (USP)
– Leverage your location
– Strong omni-channel business model
– Informed and competitive pricing strategies
– Robust supply chains
– Well-trained staff
– Staff recruiting and retention framework
– Well-planned marketing and promotions
– Database and loyalty strategies
– Socially conscious business and products
– Fulfillment and delivery solutions
Online Booming But In-Store Critical
Around 20 per cent of Christmas 2022 purchases will be online, with some industries being much higher, according to Brian, who says COVID has seen mainstream adoption of e-commerce.
And the remaining 80 per cent will also likely be highly influenced by online research.
“Shoppers spend an average of five hours a day on their smartphones and are pre-researched more than ever,” Brian says, highlighting the importance of a strong omni-channel offering and online presence.
“Browsing at the shops is becoming less prevalent. Now, people build their shopping list online and then go to the shops to consummate the purchase. This consummation means that the in-store experience remains as critical as ever,” he says.
Retailers should also embrace their community and leverage the benefits of their location and use that to inform and enhance the shopping experience to help stand out from the competition.
How Else Retailers Can Stand Out
As well as an omni-channel business model, retailers require a strong brand and a unique product supported by robust supply chains, well-trained staff, and a competitive, informed pricing strategy, according to Brian.
Planning for Christmas 2022 should have begun in August or September, and include shoring up supply chains, recruiting and training staff, and planning marketing and promotions.
Brian encourages retailers to leverage their CRM and customer database to work their loyalty programs to drive repeat business from current or previous customers.
Socially conscious and environmentally aware businesses and products will also have an edge, especially among millennials who value recyclable and biodegradable products and packaging, along with knowing a product has an ethical origin.
Fulfillment and delivery strategies are also important as we see increasing levels of home deliveries and subscription business models and partnerships with services like Amazon and Uber.
“They call it ‘The Last Mile’. It is the idea that instead of me going to the shops, the shops will come to me,” Brian says.
Discounts, Promotions and Sales
While the Chrismtas sales were once reserved for Boxing Day, they now traditionally begin with the Black Friday sales – this year on 25 November 2022 – however many retailers now start their sales as early as mid-November.
Discounting might help you move product, however maintaining margins requires having a differentiated offer and knowing the products in your category that will be winners and ensuring you have adequate stock, according to Brian.