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Comment: Do Sales still sell?

When will retailers be able to reduce extended sales promotions? By David Smith

OMNICHANNEL

Comment: Do Sales still sell?

When will retailers be able to reduce extended sales promotions? By David Smith

We are coming toward the end of what IMRG are estimating will have been the peak period for online sales in the lead-up to Christmas. Taking December as a five-week month starting 28th November, we forecasted that £7.75bn would be spent online by UK consumers throughout the month. £3.72 of that total, or 48%, was due to be spent during the first two weeks of peak activity.

The two Mondays within that peak timeframe, typically referred to as Cyber and Mega or Manic Monday respectively, are likely to have been the biggest online shopping days of the year. However, over the past few years, the results from our Index have revealed a trend of the sales spreading out more consistently over a few weeks rather than being so heavily focused on single days.

Traditionally for online in the UK, the biggest shopping day was the first Monday in December. The main reason for this was that it is the first one after everyone has been paid, combined with the effect of actually moving into December and being psychologically that much closer to Christmas.

In the US, Cyber Monday (the last Monday in November) is a day that has been actively created and sustained by retailers. It follows the Thanksgiving weekend and Black Friday week, where retailers look to entice consumers to shop by offering heavy discounts and other such incentives. Cyber Monday is the extension of that offline promotion drive into the online channel.

Amazon introduced its online Black Friday week promotions into the UK last year and we have seen more and more retailers look to encourage consumers to spend on the first Monday of December by marketing their own temporary sales offers.

While we may ordinarily expect the provision of heavily-reduced product ranges in the lead-up to Christmas to result in a large uplift in sales, multichannel retailers have been forced over a period of several months into discounting wide ranges of their stock to try to increase footfall to their high street stores.

So the question is: will the specific-day promotions have triggered the expected massive spike in sales, or will these days have had less impact this year as discounts have been available to consumers for a long time? There is the weight of marketing that goes behind the peak day sales, as well as the focus of the media to keep it present in consumers’ minds, but there remains the possibility that heavy discount over-exposure may have lessened the impact retailers hoped to have on consumers for their big days.

Which begs a further question: when will retailers be in a position to comfortably phase out this prolonged sales period? The economy and consumer confidence are certainly not encouraging that, and the offline retail results for November were not suggestive that the sales were working.

It will be interesting to see whether, for online at least, sales still have the ability to sell.

David J Smith is Chief Marketing & Communications Officer, IMRG

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