Christmas is inarguably the most important time of the year for the retail industry. For many players, the November to January period is where a majority of sales are made, forming the basis of what the next year will look like. Have a good Christmas? You start the next year on the right foot. But struggle to bring in the sales and things can get ugly fast. And no year in recent memory has seen the stakes for Christmas trade higher than now. Last year, reeling from the drop in sales
sales caused by the bushfires, with the 2019 holiday period raking in around $3 billion less than the industry expected according to ABS retail sales figures, many retailers struggled through the end of the calendar year to be hit by what can only be called a calamitous 2020.
While retail is back up and running in many ways, the next few months are likely to be anything but easy.
“Christmas is really hard to predict since there are multiple, sometimes competing, factors at play,” Jason Pallant, Assistant Professor at Swinburne University told Inside Retail.
“On the one hand, consumer confidence is down and many consumers are dealing with the fallout of the pandemic, such as job losses. On the other, some may be looking to treat themselves after having to adjust their lives and deal with restrictions.
“Either way, it certainly won’t be a ‘normal’ Christmas.”
The last chance to nail the last mile
One of the major trends that is likely to come into play this Christmas is an increased focus on online service and delivery, and a widespread take up of click-and-collect.
Stores may be open, and some customers may still prefer to shop in-store, but Australia is still in the midst of a pandemic. Doughnut days or no, people are going to avoid contact with others where possible.
“With the increase of online sales predicted to be three times what they currently are, the pressure on our freight and logistics companies will be huge,” founder of Mind your Fashion Jude Kingston told Inside Retail.
“Australia Post has sent out a very clear and strong message to its customers – plan, and plan early. When you consider that they have been delivering over 2 million parcels a day during the pandemic, you can be guaranteed this will at least double in the lead up to Christmas.”
Accenture’s managing director of retail Michelle Grujin agrees that a focus on logistics will be key to delivering a strong Christmas result this year, adding that the retailers that deliver something beyond the standard click-and-collect experience will excel.
“It’s going to come down to really creating solutions around micro-fulfilment. If a retailer doesn’t have capacity in that last mile distribution, how it uses its most valuable network – which is its stores and team – to be able to meet that demand [will be key],” Grujin told Inside Retail.
“For example, providing SMS capabilities so that shoppers can drive to an allocated spot in your parking lot, SMS the order number and a store associate can bring the order out… What we’re hoping to see is retailers using their own asset base and network to create that [last-mile] capacity.”
One example is how JB Hi-Fi is using its staff members to deliver certain products, easing the pressure off of its logistics partners (while also keeping more of its employees working), and Officeworks’ ability to deliver goods directly to a customers car by way of an SMS’ed order number – something Domino’s is also trialing now.
“I think [retailers] have to be focused on tapping into what’s important for customers, reshaping space in their physical network, keeping customers and team members safe, and to provide the right level of service,” Grujin said.