Will it be a happy new year for UK retailers?
4 min read
29 December 2015
The Confederation of British Industry recently labelled 2015 a "tough year" for retailers. As the meteoric rise of ecommerce continues and market competition increases once more, an effective marketing strategy is crucial if businesses are to achieve strong sales over the festive period.
With the market rocked by weaker-than-expected Black Friday sales, 70 per cent of stores have introduced pre-Christmas discounts in an attempt to drive revenue. However, those that wish to succeed must cut through the sales noise and strike the correct balance between planning and agility in order to reach out to potential customers. In terms of their marketing approach, integration and personalisation are essential for retailers looking to take the lead in 2016.
As in-demand products are purchased in high-volumes in the run up to Christmas, some consumers are inevitably met with “out of stock” messages, often causing individuals to take their custom elsewhere. To minimise this, businesses must anticipate the effects of their advertising activities and work with suppliers to ensure that products are available in the quantities required. Similarly, retailers need to avoid stocking too much inventory, as they then risk having capital tied up in unsold and outdated stock. Although forecasting is difficult, offering tactical incentives to those who pre-order can help to gauge interest in certain items.
Importantly, systems must be put in place to retain customers who have attempted to purchase an item which is no longer available. In store, staff should be trained to identify and offer suitable alternatives, while online, simple algorithms which display similar options “people who viewed this item also looked at…”, offer an admissible and convenient choice that doesn’t require time-poor consumers to shop around.
In order to maximise marketing spend, marketers should move to design adaptable point of sale (POS) materials which can be tailored to serve as sales aids during the three peaks; Black Friday, Christmas and the New Year Sales. Physical signage will need to be printed and delivered in advance, however, leaving space for staff at individual stores to personalise offers allows discount levels to be changed and certain products to be promoted depending on levels of demand. This flexibility can also be achieved digitally, email and website templates should be created in advance, with key details added at the last minute and the code potentially re-used to ensure that marketing activity remains agile.
In the run up to Christmas and during the January sales, customers are often bombarded with e-shots from retailers. However, marketers should avoid a ‘spray and pray’ mentality and instead focus on year-round data collection, allowing the creation of targeted emails which are personalised to reflect the buying history and product preferences of individual consumers.
Sign-posting is essential, prompts for customers regarding the last ordering date for Christmas delivery and news of previously-browsed products now available at a discount can act to increase basket spend and prompt individuals to re-enter the buying journey. Although personalisation and data collection is at present best utilised by supermarkets and large retailers, its adoption is likely to increase in 2016 and can significantly improve conversion rates.
With so much structural change in the sector and digital marketing advances becoming a key differentiator too, the trading environment for retailers has never been tougher. The winners will be those that embrace the changes and balance the need to plan with flexible delivery.
Vince Kerrigan is strategic solutions manager at print, branding and marketing specialists Vital Communications.