The first Christmas trading updates out of the gate started the new year and new decade on a positive note.
As usual, Next was the first to report, revealing strong overall results that prompted an uplift in its profit guidance for the full year. It attributed its year-on-year growth to a colder November and better stock availability, underpinned by its strong online offer.
Similarly, Mountain Warehouse was buoyed by online sales, although it emphasised the important role played by its bricks-and-mortar stores. In fact, the outdoor clothing retailer insisted that its success proved the “doom-mongers” who claim the high street is dead are wrong, and it continues to open stores both in the UK and overseas.
It was a welcome and defiant start to the year after a tough 2019 for retail. But I suspect others – especially many that don’t have a strong online offer – will not have fared so well. Footfall stuttered in the run-up to Christmas, prompting high levels of discounting. Margins will have suffered.
There are also signs that shoppers are developing discounting fatigue, which (as feared) had a knock-on impact on the end-of-season Sales. John Lewis reported a “slower than usual” start to its clearance Sale, while Next said the number of shoppers visiting its stores on Boxing Day was “disappointing”.
Wouldn’t it be great if the industry could make a collective New Year’s resolution to eschew heavy, knee-jerk discounting in 2020, in favour of a more considered approach that protects the bottom line? Investing in product and customer experience would be a far better way to boost footfall in the longer term.
Despite the ongoing challenges facing the industry, of which discounting is certainly one, Drapers is looking forward to a year of opportunity. Fashion, retail, branding and finance experts have given us their predictions for 2020 and the decade to come, and there are exciting times ahead for the businesses willing to embrace change and innovate.
We also celebrate this year’s 30 Under 30 rising stars of fashion retail, as part of our long-running Next Generation initiative. Reading about these talented young people filled me with optimism about the industry’s future. Click here to find out more.
Happy new year, and here’s to a fresh start for fashion retail.