Retail – Christmas Trading

“With consumers continuing a shift to online shopping, it is important that traditional retailers optimise their bricks and mortar store portfolio to keep up with multichannel retailing. We work closely with Deloitte Real Estate to assist retailers with the strategic and tactical business challenges an extensive property portfolio can bring. This includes helping cut costs and restructuring of the company's real estate portfolio.”

Lee Manning, Deloitte Restructuring Partner

The big story of Black Friday this year was the move away from physical stores to on-line. Across the Black Friday weekend footfall fell by 9.6%, whereas online sales were up 16% on last year. In a shift that seems to have caught some retailers off guard, some have referred to this as a “Red Friday” for bricks and mortar retailers with Tesco left with stacks of heavily discounted electrical and home appliances two days after the event whilst conversely enjoying its busiest ever 24 hour period on Tesco Direct.

This brings many challenges for retailers. Those who experienced issues with their online platforms are estimated to have lost £5.31m of sales due to website errors and crashes. Mobile devices are becoming an increasingly popular shopping method, however product search and conversion takes too long and leads to many abandoned carts. Fulfilment and dealing with returns all impact the supply chain and logistics, hitting the bottom line. Click and collect can be a blessing as well as a curse, it drives in-store footfall and add on purchases but still costs three times as much to get product to a customer than onto a shelf in the store.

With the crucial Christmas trading period upon us, retailers need to remain disciplined and not be forced into panic discounting. Winners this Christmas will have achieved the following:

  • An ability to scale delivery operations to meet customers’ expectations
  • A seamless digital experience, driving loyalty and conversion through great content and services
  • An efficient back office to protect margins
  • Effective use of data analytics to manage stock and maximise customer engagement
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