Great expectations: How UK retailers can beat the analysts and maintain momentum
By Emily Benson, Global Director, Performance and Enablement at Lightspeed Commerce
That Napoleon once disparaged the UK as a ‘nation of shopkeepers’ is one of history’s great miscommunications. He clarified his words later in life: that to possess such an enterprising attitude – “l’esprit des Anglais” – was something we should be proud of.
The world has changed many times since then, yet the UK’s enterprising attitude remains unwavering. One only has to note the nation’s defiance of gloomy economic forecasts over the last few months to see “l’esprit” is alive and well. December’s retail sales grew 6.9% year-on-year compared to 2021. December 23rd was Tesco’s biggest day for sales – not just last year – but in its 104 year history. Come January, the UK’s hardy retailers were at it again, defying analysts’ expectations with a half point rise in sales as shoppers sought to take advantage of post-Christmas discounts.
Yet analysts are telling national newspapers it is “hard to see” how the retail sector can maintain strong momentum after these seasonal discounts end. This is at odds with news last week that UK consumer confidence had rebounded from historic post-covid lows – or that footfall across all UK retail destinations rose 9.1% annually to the start of February. Indeed, while recession in Germany and Italy seems all but inevitable, the UK seems to have narrowly avoided it.
There can be no doubt there is an inflation-fuelled ‘cost of living crisis’ in the UK, an unfortunate side effect of Russia’s war in Ukraine and high consumer demand meeting supply chain bottlenecks in covid’s wake. It’s the same picture in almost every market where we have customers. Yet the UK is comparably sanguine.
Maintaining sales momentum into the summer months might be difficult, but it is not impossible. However confident analysts may be that the end of seasonal discounting is some sort of coup de grâce for retail, we don’t see this being the case. There are simple moves that we’ve seen our clients make that, combined with the UK’s characteristic grit, can help to keep the customers flowing.
Invest in the downturn:
To borrow a phrase from the world of marketing, retailers need to ‘cut through the noise’ to attract customers. Yet when faced with a downturn, marketing is usually the first budget to be cut. If your competitors are making less noise, there’s less of it to cut through, presenting an opportunity for you to shout a bit louder, increase your market share, and win some new customers.
If you go to the same deli every lunchtime, over time they will remember your name, your order, and ask how your day is. This most basic level of rapport is fundamental to good business. Happy customers become loyal customers. If someone keeps coming back, let them know you’re grateful! If a regular shopper hasn’t ordered in a while, send them a personalised promo code to bring them back and keep your company firmly in their mind.
The idea of clearing leftover stock at discount prices to encourage customers to purchase full price items is not a new one. The Boxing Day sale is an annual event that nearly every retailer prepares for. These events are great, but keeping an eye on the news can help you to prepare for anomalies – seasonal trends, rather than seasonal events – that can encourage sales.
For example, it was reported recently that holiday firms are reporting record bookings as people seek their first proper foreign summer holidays in three years. Why not beat the crowds and bring out your summer stock early for excited holidaymakers?
Hey big spender:
Seasonal discounting usually means getting rid of last season’s lines to patient, and usually lower-spending, clientele. High spenders don’t tend to be impacted by downturns, so if your business can, shift your focus to enticing high rollers to carry on spending. They tend to want the new and the exclusive.
With the right platform you can identify high-spending customers and entice them; tease them with new products early, offer them exclusive access, even queue jumps. A highly personalised experience that makes them feel special will encourage them to keep coming back.
Every business is clearly different – but thinking laterally about who your customers are and why they come to you is essential if you want to thrive over the coming months. Having the right platform to better understand your customers is a great place to start. We’re a nation of shopkeepers – an enterprising bunch that have defied expectations and, with a bit of moxy, can do so again.
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