It’s that time again when shopping shifts into overdrive. The festive season is responsible for as much as 30 percent of a retailer’s sales for the year and that figure is only likely to rise. However, a recent Periscope By McKinsey study has lifted the lid on some emerging trends with big implications for UK retailers:
Consumers are on the look-out for ideas and inspiration
Asked what worries them the most, UK consumers said that not knowing what to buy (47%) was the biggest issue (just ahead of crowds and queues in-store at 45%). In their search for inspiration, shoppers listed perusing retailer websites as their ‘go to’ research channel (74%) with browsing instore (67%) as their next port of call. In addition to using search engines (62%), almost a third (28%) are also turning to the more traditional channel of catalogues, flyers and newspaper adverts to give them much-needed gift ideas. To help inform their buying decisions this holiday season, consumers also welcome receiving marketing messages and communications from retailers that help inform and guide their seasonal shopping efforts. Promotional e-mails were by far the most preferred choice for 59% of consumers while coupons, interestingly, took second place (27%) followed closely by TV and magazine promotions garnering 25% of the vote.
What does this mean for the retailer?
Consumers want guidance and inspiration on what to buy and retailers that help them cut through the clutter and make confident choices will be well-positioned to convert undecided consumers and secure sales.
To ease the shopping experience for customers, retailers need to make it easy to search and locate products, conduct careful stock planning, and initiate instore strategies that alleviate customer frustrations around queuing to pay or get assistance at peak shopping times.
Clear customer segments emerge
Asked when they start thinking about shopping for the festive holidays, 52% of UK female shoppers said that they get a jump-start on their holiday gift buying in the October-November timeframe with 24% admitting to getting started even before that. For male shoppers, while the October – November timeframe is the prime time for their festive shopping (45%), 39% are still very active in the November – December period. For women, the focus is on gift purchases for the household and children, while male consumers shop primarily for their partner/significant other.
A clear correlation between age demographics and spending plans is also revealed, with 45% of UK shoppers aged between 30-39 indicating the desire to allocate higher budgets (£500 or more) on their seasonal shopping this year.
What does this mean for the retailer?
Savvy retailers will need to think beyond Black Friday– getting both the timing and targeting of promotions and deals right to capture those hyper-organized consumers keen to get their gift shopping tasks wrapped up early. Female shoppers represent a prime target from pre-October to early November which retailers would be remiss to overlook, whereas the mid-end of October to December timeframe is the ideal window to capture the attention of male shoppers.
Mobile has transformed instore shopping behaviours
For today’s connected consumers, the smartphone has become a vital shopping aid. Far from diminishing the appeal of physical shopping, smartphones are being used for a variety of select purposes whenever shoppers visit bricks-and-mortar stores. The study findings show 49% of UK consumers use them to compare prices with competitors, 30% to look up further product information, 29% to compare products in which they’re interested against similar products also available on the market and 27% to read product reviews.
Retailers should not assume it’s only the younger generations that are using their smartphones to compare prices/products, read reviews, hunt down coupons or purchase products they’ve looked at/touched when instore. The research findings indicate that 57% of those aged between 40-49 are the most likely consumer group to compare prices on their mobile and 38% of those aged between 50-59 are the biggest demographic using their smartphones to investigate further product information.
Taking advantage of a digitally enabled instore shopping experience is also particularly appealing to consumers aged 30-49. For them, facilities such as the ability to digitally browse products and to self-check-out, mobile POS and getting offers on their phones all add up to a more convenient and consistent experience.
What does this mean for the retailer?
Retailers should take steps to enhance access to product information and reviews that will make instore shopping even easier and build the confidence to make a purchase while standing at the shelf. They will need to keep a careful watch for the newest technologies, practices and data sources and be ready to implement and execute the necessary changes quickly and efficiently in order to excite the customer and impact the bottom line. The goal is to make sure that instore shopping has all the advantages of online shopping plus the convenience of the in-store experience.
The physical and digital convergence is the new shopping normal. Given these trends, it’s becoming clear that those retailers who can translate that convergence into targeted omnichannel experiences, get personalisation right and win the battle of consideration by launching promotional campaigns earlier will be those that triumph this season.
Credit: Brian Elliott, Founder and Head of Innovation at Periscope By McKinsey.
Holly brings a wealth of experience in both print and digital publishing. As Modern Retail’s Content Editor, Holly is passionate about helping independent retailers to thrive in today’s ever-changing market.
