There was no doubt the Christmas period would be tough and, as retailers’ trading results start to come in, the challenges can be seen in the figures.
Marks & Spencer’s 5% drop in general merchandise sales in the run-up to Christmas may have sealed the fate of chief executive Marc Bolland.
And Next has called its 0.4% increase in Christmas sales “disappointing”.
However, there were some successes, with John Lewis remaining as solid as ever and, most notably, Jigsaw, a business that has really made its mark in the last few months, announcing record-breaking Christmas sales. I’m sure many lessons have been learned in the last 12 months, but a remaining challenge for all retailers is how to tackle the level of discounting versus the impact on margins.
As we look to the year ahead, it will be of great interest to see what happens to the formidable Black Friday. Will 2016 be the year that retailers finally step away from the discount day? While unlikely to be the case for all, I would imagine that after the difficulties this year we will see many more retailers thinking about their winter strategy without it. The impact it had on increased levels of discount throughout December shows just how damaging Black Friday can be for retailers.
Alongside a shift in discounting culture, 2016 will inevitably see another move on in the use of technology and digital initiatives. The past few years have seen retailers go back to basics in many cases to look at back-end systems (many of which had become a spaghetti junction of add-ons) and ensure new systems were implemented to streamline processes and integrate channels for a single customer view. This is increasingly important as mobile has swiftly become yet another vital shopping channel for many.
A year of innovation
2016 could see innovation increase again in the digital sphere, with quirky tools and futuristic technologies coming back into the fore. I’m sure we will see some initiatives eventually dismissed as fads or moving on to more sophisticated versions (remember QR codes?), while others will become part of every retailers’ future. It will be an exciting area to see develop creatively again.
For those already excelling in this area, don’t forget this is your last week to enter the Drapers Digital Awards, which will be taking place at Grosvenor House in London on 28 April. With categories including Best Digital Campaign, Best Use of Social Media and Best Customer Experience, it’s a chance to celebrate the more specific and niche parts of the business that are having such an impact on the way consumers shop.
The rapid pace in changing consumer habits will continue into the new year, but I think we will see a more strategic approach to tackling them. The introduction of click-and-collect resulted in many retailers following suit and offering this delivery method – and for free. Since then, John Lewis announced in July that a charge would be added to its click-and-collect option, while others have re-evaluated their delivery options and prices.
While the introduction of anything new will always result in businesses looking at their competitors’ approaches, the last few years have allowed fashion retailers to grow in confidence and understand that new technology, shopping habits or delivery channels do not require them to step away from their own brand ethos but to embrace and be selective over the tools that work for their business.
With exciting (but sure to be challenging) times ahead, I want to wish you all a very happy new year and prosperous trading in 2016.