Last year’s Black Friday garnered many column inches, specifically around fisticuffs in crowded supermarkets.
However, many retailers were disappointed to find that the event just brought forward sales that would have happened later in December, rather than generating any additional business. The real issue facing most retailers is: can they deliver growth that meets or exceeds the market in 2015?
According to the Office for National Statistics, in the UK online sales grew at an average rate of 8% during 2014. The fashion retail category (textile, clothing and footwear) grew at 21.5%. Set against this figure is a similar range of growth figures from high street retailers in 2014, such as Next, Arcadia and Sports Direct. In today’s commercial world, what is a realistic benchmark and how demanding should business leaders be? Should you aim – or settle – for the market growth of 8% or, as a fashion category, of more than 20%?
Having researched the sector and customers in the market, the minimum any fashion retailer should aim for is the category growth of 21.5%. We have seen fashion retailers (with circa 70 stores) report growth of 60% in 2014 and set a target of 50% for 2015.
The scale of target is determined by the organisation’s leadership and structures to respond to customers in the market.
Once you have your target growth rate in mind, you should ask yourself a series of questions. Is there a clear and shared understanding of your core proposition? Are you able to see, on a monthly basis, expenditure on online campaigns, as well as the outputs? Do you promote a culture of ‘test and learn’ when making changes to your website?
Do you have an understanding of traffic, such that you know where your customers are coming from? Is your website experience informed by and developed through engagements with customers online as opposed to market research? Are you iteratively improving the website every month based on proven increases in sales?
The answers will give you a powerful insight into the effectiveness of your commerce strategy. Once you have that, you can invest in the online channel with greater certainty and grow faster than the market.