The Christmas trading updates have been a mixed bag, dividing retailers into two starkly contrasting groups of under- and over-performers.
That has inevitably led to confusing conclusions. “The warmest December on record” created drastically different results.
Primark and Next blamed slow sales in outerwear for their weak quarterly performance, yet on the very same comp sheet others such as Asos thanked men’s coats and women’s boots for driving visits to the site; resulting in growth of over 22% versus the same period last year.
Cyber Monday instead of Black Friday
These inconsistencies in attempts to measure success in the retail sector highlight the increasing irrelevance of traditional sector key performance indicators such as weather, same store sales, mall footfall, and trading days in the month.
The emerging next-generation consumer paradigm demands a new language to discuss retail performance.
This may include omnichannel benchmarks, but also social media metrics such as Instagram followers or page views that replace traditional marketing spend, but also provide an indirect real-time commentary on a brand’s social relevance and status.
At its best, a dynamic omnichannel connection engenders a deeper real-time two-way connection to the consumer and provides new datasets to accurately measure company performance.
The revolution is not being televised
Public company reporting also excludes the as-of-yet immeasurable effect of the emerging independent consumer brand landscape, a cohort of venture capitalist-backed consumer brands that are challenging the existing industry leaders.
Despite being large businesses with considerable consumer mind share, many of the newer, more relevant sector leaders, are privately-held, still growing into the potential to go public.
In many cases this directly results from a higher proportion of online sales, with a traditionally higher customer acquisition cost therefore longer road to profitability required by public markets. The result is an “invisible economy” to the street.
Therefore I am
Even more challenging to measure are the intangible drivers of consumer choice.
“The concept of lifestyle consumption sees consumers increasingly choose brands that reinforce their identities and importantly, value sets”
Beth Pickens, William Blair
The pervasive concept of lifestyle consumption sees consumers increasingly choose brands that reinforce their identities and importantly, value sets.
This leads consumers to ultimately ask more of the companies and the brands they support, reflected in company culture, and societal impact.
This leads to another set of key performance indicators that are as of yet not on the radar screens in an institutionally-measurable way.
But this distinction is a critical component of completing the customer relationship and responding to its rapidly evolving needs.
The most powerful holiday advertising campaigns this year were written not by retailers and brands, but rather by the customers themselves; the proverbial consumer Christmas table was set.
An heirloom lace tablecloth handed down from a great-aunt, handmade snowflakes from the children’s school, noel-themed porcelain plates from a designer collaboration with a mass retailer, limited edition Christmas blooms. Instagrammed and tweeted – along with a flurry of hashtags #friends #family #letitsnow - to our closest connections.
- Beth Pickens is managing director, global consumer and retail, at investment bank William Blair