News

Christmas cheer or christmas sneer? Festive shopping visits decline as online retail booms

9 min read

10 December 2018

Reporter, Real Business

The latest statistics show that it's not all Christmas cheer for high-street retailers as shopping visits decline further this month.

Is the great British high-street a lumbering dinosaur heading for extinction? That’s the rhetorical question we’ve all been asking ourselves lately.

And in terms of who exactly has been talking about this issue, it really has been ALL of us.

We’ve seen impassioned television adverts, emotive op-eds, and even strong words from politicians about the fragility of the high-street ecosystem.

And they are ALL telling us how vital it is that we, as consumers, embrace the retail facilities on offer in our own communities, and support these associated businesses to ensure their survival.

Whilst we’ve reported on the decline in high-street spending over the autumnal months, has anything changed, for better, or for worse, for British high-street retailers during the last few weeks before Christmas?

Let’s find out…

November stats

According to sources at Sky news, shopping visits to British high-street stores fell at an alarming rate during November 2018.

They were reported to have fallen at their sharpest rate since the recession. But why was this?

The reasons were two-fold, and unfortunately, they are nothing we haven’t heard about before.

Brexit and better digital access to products

Fears over Brexit and online competition have stifled growth on the British high-street, as consumers look for better deals, and easier product accessibility via online retailers.

According to a statistic from the British Retail Consortium, the decline has been significant and has dropped by an estimated 3.2% in terms of footfall compared to the same month last year.

Predictions for the rest of December 2018

According to further reports provided by high-street retail analysis expert Springboard, rates of shopping visits look set to decline further as December goes on.

They estimate that the rate of shopping visits in the UK will fall by 4.2% by the end of the month.

Black Friday has changed this year

But why the dramatic drop in shopping visits in only the space of a year?

Well, Black Friday is as much, or perhaps, even more, to blame than Brexit:

Evidence has shown that Black Friday, the epic discount retail holiday that hails from the United States, is the culprit for decreased shopping visits this year.

But why this year in particular?

It’s because this event, which used to centre on physical stores discounting their products, has moved increasingly into the online market.

The shift this year has been particularly devasting for high-street retailers.

Yet only last year, Black Friday still had a very physical presence, with consumers largely flocking to big high-street chains to access their discounted products.

However, this year’s Black Friday performance has shown that this event is firmly in the hands of digital retailers, with the likes of Amazon performing especially well.

The online retailer actually broke records in terms of Black Friday consumer spending in the UK, having sold hundreds of thousands of products by just mid-morning on the day.

A big reason for its winning position this year is because, as an online retailer, it was able to open the gates to Black Friday spending at midnight the night before the event, something that physical stores can never do.

“With one-in-every-three-pounds of non-food purchases made online last month, Black Friday accelerated the movement from in-store to online in the lead-up to Christmas.” – Helen Dickinson, BRC

Brexit uncertainty

Uncertainty in any form is never good for business.

And uncertainty about the UK’s economic health post-Brexit will mean one thing for consumers, namely the tightening of purse strings.

Consumers are more likely to go online for a chance to bag better deals, whilst gaining access to a wider array of products on offer at the click of a button.

In many cases, customers can save money via free or discounted delivery costs online compared with the expenses of travelling to physical stores, where they have to pay out money in terms of transport and parking facilities before they’re even able to shop.

 “As we head into the zenith of the retail trading calendar, both retailers and consumers alike are in the midst of the greatest degree of uncertainty in recent times.”
– Diane Wehrle, Springboard

Concerns over what direction Brexit is going to take is also making many retail businesses concerned over their future, and especially if they’re export businesses, or are reliant on importing their goods from the continent.

“The Black Friday discounting period also began earlier for a large number of retailers negatively impacting footfall across a longer period over the month. – Helen Dickinson, BRC

Global online retailers are the big winners when it comes to outpacing Brexit uncertainties, as they have larger budgets to be able to navigate the potential logistical issues that may come with the final deal when it comes.

However, for smaller high-street retailers with strict budgets and the need to maintain a steady cash flow, extra costs or any potential barriers that may come after Brexit could mean the death of their business.

Is it all doom and gloom?

The answer is no. Why? Because there are initiatives out there to help the ailing high street, including Small Business Saturday, a nationwide campaign designed to empower, educate and upskill small high-street business owners.

Here's what the high-street can learn from online retail

What high-street retailers can learn from ASOS Read more

And aside from Chancellor Philip Hammonds’s well publicised budget declaration to help the high-street, there are things business owners can do to help themselves, including upping their customer service, holding events at their stores, and offering customers more flexible payment and savings plans.

A CEO offers retailers advice: Santosh Sahu, On the dot

“No footfall, no problem – the practice of tracking visits to retail locations is an anachronism that the retail community needs to let go.”

“They should be more concerned with their ability to serve customers in the way they want, not how it’s always been done. That means tracking visits to their online presence, understanding the orders placed and the ensuring variety of delivery options they offer meets the needs of contemporary consumers.”

“The value in retail stores is increasingly less about the number of shoppers that arrive and more about the number of parcels that leave.”

“Physical retail stores close to the consumer are the single biggest advantage traditional retailers have against the Amazons of the world. If retailers don’t use their stores in this new way, they’ll lose them.”

Small business owners must listen to customers

Christmas spending is always going to be a challenging time for consumers, and it helps if smaller high-street retailers listen to, and understand their concerns.

These include a fear of overspending and budgeting for Christmas. So physical retailers must show they understand the seasonal struggle by offering customers clear incentives to shop with them, including the methods listed above.

Doing this will foster a warmer retailer-customer relationship, and encourage loyalty, says the director of Small Business Saturday, Michelle Ovens.

Read more about her recommendations for small high-street businesses here.