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Consumers to spend £1.5bn more this December

New figures have revealed that sales this December are forecast to rise by 4% year-on-year, with consumers predicted to spend £42.4 billion - over £1.5 billion more than Christmas 2013.

GENERAL MERCHANDISE

Consumers to spend £1.5bn more this December

New figures have revealed that sales this December are forecast to rise by 4% year-on-year, with consumers predicted to spend £42.4 billion - over £1.5 billion more than Christmas 2013.

According to analysis from business advisory firm Deloitte, online sales are forecast to account for 13% of total sales. While this is just one percentage point more than December 2013, Deloitte predicts that online will account for 50% of the market growth, driven by growing consumer engagement with digital technology, combined with a growing number of retailers adopting a multi-channel model.

Deloitte also estimates that 40% of physical shop sales will be digitally influenced, meaning consumers will use some form of digital technology to inform or facilitate their purchase. This is equivalent to £15 billion, which is almost three times the size of forecast online sales for December.

Ian Geddes, head of retail at Deloitte, said: “Growth in the influence of digital on physical retail has been driven by consumers’ desire to access information on products and services, compare prices and increasingly pay and transact via digital devices. Those retailers that have invested in developing apps may now find that if these are only optimised for use as a separate channel, rather than an integrated part of the shopping experience, they will not be fit for purpose.

“As investment in in-store digital technologies increases, such as mobile payments to facilitate faster, more convenient transactions and beacon technology to track shoppers in-store and deliver personalised messages and promotions, so will the digital influence on the physical environment. Just as physical retailers have benefited from the growth of click and collect, technology investment in-store will increase the number of shop visitors who buy and how much they spend, as well as help join the online and offline worlds.”

Click and collect is expected to see £2.5 billion in sales this Christmas. At 45% of all online transactions, this is almost double the level seen in December 2013. 

Geddes added: “There can be little doubt that click and collect will drive footfall in-store this Christmas, but it will be up to retailers to get their strategy and execution right to capitalise upon the opportunity. Increases in sales won’t happen by default; they may require some adjustment of the in-store experience targeting customers that are clicking and collecting. However, the real winners will be those retailers that have invested in adapting their supply chain and warehousing to accommodate these changes in consumer shopping behaviour.”  

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