When we agreed to collaborate with Retail Week on Christmas in July, we expected a mixed response.

Before the pandemic, Christmas in July was a fixture of the retail calendar. This year, while many were in favour of its return as hopes rise that the worst is behind us, some were against it, particularly certain groups of consumers, different industries and even some journalists, who all thought it was ‘too soon to think about Christmas’ – and made their views clear on social media.

Those involved with the industry know that this was never an opportunistic response to the easing of lockdown restrictions, but part of the usual planning process that happens every year. That said, it was fun to see certain retailers really embrace the Christmas theme in an attempt to make up for missed celebrations, particularly as the public returned to theatres, restaurants, sporting events and other activities.

“Consumers have broadly decided how and when they will shop, and through which channels, with a third of them intending to buy in-store this year”

I have had the chance to take part in my own delayed celebrations, too. The other week, we hosted a small family party to celebrate my son’s 18th birthday, which was originally postponed in January.

I wrote at the turn of the year that we only just managed to get out and pick his present before the Christmas lockdown.

Thankfully, we expect Christmas to be different this year with people able to get together. While consumers may not be thinking about Christmas just yet, for retailers, the challenge is already underway.

Global challenges

First, the good news: if everything goes as planned, we should not need another lockdown in December. 

If people are able to spend Christmas together, they are more likely to spend bigger: in fact, 24% of respondents told our consumer sentiment survey that they are looking to increase spending with 22% of those wanting to make Christmas extra special. 

We also found that consumers have broadly decided how and when they will shop, and through which channels, with a third of them intending to buy in-store this year. 

This certainty should help with planning for both consumers and businesses, with more consistent levels of demand leading to less pressure on retailers and supply chains. 

Now, the bad news: supply chains could remain problematic, exacerbated by Brexit challenges such as HGV driver shortages; unexpected spikes in consumer demand; and significant issues affecting freight and delivery delays, not just in the UK but globally. 

We have already seen a more than five-fold increase in freight costs for some of our clients and have witnessed the damage that unexpected shocks to a supply chain can cause when the Suez canal was blocked earlier in the year. 

But retailers that can establish – or already have – good relationships with their suppliers are likely to see a significant benefit this year.

“With pent-up consumer demand and post-pandemic positivity, Christmas has the potential to be a success this year”

A trusted relationship will enable them to control supply more easily, guarantee large orders and consistency of delivery that will help them forward-plan more effectively.

While we should see this Christmas as a one-off, some may wonder whether this will remain a longer-term problem.

It is certainly a situation that highlights the fragility and limitations of our just-in-time supply chains, which are increasingly driven by consumer demands for ultra-fast delivery.

But it is not a trend we are observing everywhere. On certain big-ticket items, for instance, customers are more willing to wait on long lead times. Whether that is because they currently have no choice remains to be seen.

Early Christmas shopping

For retailers with a captive consumer, now might be the time to try to build relationships with those that you do not have one with – through service, experience and the right engagement.

Back to Christmas. While challenges and uncertainties mean spending is likely to be slightly earlier than usual, we do expect it to be less volatile than in 2020. 

That said, as an informed consumer, I have started shopping for Christmas already: not through concerns about challenges and uncertainty, but because my family already know what they want – they can be difficult to buy for and deals abound right now.

Whatever happens, retailers that are ready to capitalise will succeed. To do this, they should take the time now to embed agility into their operations and really get to know their customers: who they are, who they trust and where they will shop.

With pent-up consumer demand and post-pandemic positivity, Christmas has the potential to be a success this year.