While the golden quarter may have disappointed, 2016 is a new opportunity for retail to return to growth by focusing on consumer experience.
Many of us have barely packed away the Christmas decorations or switched off the festive lights, yet the verdict on Christmas 2015 already looks to be inescapable – this has been a golden quarter that simply failed to sparkle.
“A reluctance by consumers to turn away from frugal habits learnt in the downturn has ensured this retail Christmas cracker had a decidedly underwhelming bang”
There were moments of cheer – the Boxing Day footfall springs to mind – and there will be enough festive winners to ensure it has been no disaster.
But a reluctance by consumers to turn away from frugal habits learnt in the downturn has ensured this retail Christmas cracker had a decidedly underwhelming bang.
In that way Christmas mirrored the rest of 2015 – solid at best. But those waiting for the growing levels of disposable income to translate into a sales boom have been left frustrated.
Yet, like the 12 months that preceded it, the Christmas period was strewn with portents of how consumer behaviour will underpin the retail landscape going forward.
The shape of the Christmas trading pattern – and with it the annual retail model – has been remade with the establishment of Black Friday in the UK.
It has deepened the foundations of a discount culture that will take years of effort to break – if indeed the industry has the collective will to tackle this problem in the first place.
And online, particularly mobile, sales have reached another tipping point that will test retail infrastructures to new levels as costs to serve consumers continue to grow.
But at the heart of all this is the question of spend – will 2016 be the year that meaningful growth returns to retail?
A retail recovery often lags a post-recessionary return to confidence and wage growth. However, the length of the recent downturn and a set of powerful cultural, social and political influences mean the circumstances within which this recovery is taking place are different.
Consumers have spent more, but they have often done so outside traditional retail channels – seeking experiences, entertainment and leisure services.
“The winners in 2016 will be those that understand their customers in order to offer experiences that stand out”
Fragile confidence in the recovery and geopolitical uncertainty are creating an ‘age of experience’ as consumers place as much value in how they feel as they do the practical nature of what they buy.
Retail has much to look ahead to with confidence as a recovery beds in further.
But the winners in 2016 will be those that can master the challenge by understanding their customers better than ever in order to offer experiences and connections that truly stand out.
Those of you who have recovered from the new year’s haze will have noticed some changes to the first issue of Retail Week this year.
The new-look magazine refines our multichannel offer of news, insight and analysis further, ensuring the best experience whichever medium you chose to consume Retail Week through.
We believe our live, digital and print offerings now complement each other better than ever before but as always we would like to hear your feedback.
In the meantime, happy new year.