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Analysis: 31% Increase in Online Sales over Festive Period
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Analysis: 31% Increase in Online Sales over Festive Period

The Christmas holidays proved to be a challenging time for the high street, with great competition amongst retailers. Following the hugely successful Black Friday weekend, many brands were forced to continue discounting over the festive season to keep up with customer expectations. As a result figures from accountancy firm, BDO, reveal that like-for-like sales on the high street fell by 1.4% year-on-year in December. The fashion sector specifically saw sales drop by 3.1% for the month and 6.1% year-on-year on the high street.

However, during the same period, brands including House of Fraser saw their online sales rise by more than 31%, and John Lewis reported a sales jump of 19% online, demonstrating the power of this channel over the busiest shopping period of the year.

The high street has clearly struggled to compete with the convenience and speed of online shopping this Christmas, and with tablets on top of gift lists this year, many people enjoyed purchasing on them. On Boxing Day alone, online shoppers splurged a staggering £519,000 every minute, with an estimated £748 million spent throughout the day.

Successful retailers embraced the modern shopper

With so many people shopping online, retailers are having to adapt to provide customer experiences tailored to digital channels. However, they are simultaneously facing another challenge; the fact that the lines between online and offline have become blurred. The “modern shopper” now encounters endless messages through a wide range of online and offline marketing channels.

Separate ‘online’ and ‘offline’ shoppers no longer exist - a recent survey from Deloitte suggested that around 95% of online sales are incremental to store sales. Modern shoppers browse using multiple devices to research a purchase and then buy wherever and whenever it suits them, often influenced by factors beyond the retailer’s control.

Therefore, it’s clear that one type of activity in isolation won’t drive a user through the purchase funnel. The retailers that tie their online and offline services together are the ones seeing the greatest sales and enhanced customer engagement.

Marketers must have this holistic view of attribution in order to build the most effective campaigns. During Christmas 2013, a staggering one in three John Lewis “Click and Collect” customers bought additional items in store. Furthermore, in the same period, Argos’ “Click and Collect” customers made up one third of the overall business, and online sales grew by 46%. Shoppers are no longer interacting with a retailers once and purchasing instantly, so a cross channel view is imperative.

Engaging with customers during the January Blues

Competition doesn’t stop with Christmas for retailers, it’s all year round. So what marketing techniques can retailers adapt to engage with customers when their purse strings are tighter?

January can be a difficult month for retailers, and getting the year off to a good start is crucial. Retailers need to have firm marketing strategies in place to combat this quieter period, offering great customer experience and targeting customers effectively.

By implementing a retargeting campaign for example, retailers can strategically reach customers based on their purchase history. For example, if a shopper bought flights as a Christmas present, a retailer could follow up with hotel offers for that destination. There’s so much that a company’s website data can tell them about their visitors. By analysing this data properly, retailers can make better decisions about how to target customers in January, and in turn drive sales by rewarding returning, loyal customers.

Partner up & raise awareness

Partnerships that enable retailers to offer great value (for example, cashback or voucher deals) are another way to retain customer loyalty. Cashback sites like Quidco and TopCashback incentivise people to purchase, rather than just raising awareness, which is beneficial at this time of year when people are more reluctant to spend. The modern shopper is used to searching for the best deal in the January sales, and so partnering with publishers is a great way of making your brand visible in those searches. Furthermore, cashback sites offer retailers highly valuable databases of lucrative, targeted and segmented customers, ideal for the quieter months.

Overall, the figures from BDO show that people turned from the tills to the internet over the festive period. In order to keep up with the growing trend of fast, convenient online shopping, retailers need to embrace the power of online, but be smart about their marketing this month. By investing in digital marketing campaigns such as retargeting and attribution, retailers can ensure that they kick start the year with strong figures.

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Nick Fletcher

Nick Fletcher

Nick joined Rakuten Marketing in August 2013 as Director of Service Strategy; responsible for cross-product strategy as well as heading up the team that manages our Network in France and Germany. Prior to joining Rakuten Marketing, Nick was at Tradedoubler for 6 years, where he held a variety of roles in the international and local UK teams.

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