By Richard Robinson, Managing Director of Xeim Advise, Econsultancy and Oystercatchers
To quote the Conductor on The Polar Express “Seeing is believing, but sometimes the most real things in the world are the things we can’t see”, and that my friends will be the story of Christmas 2020. Everything and nothing have changed.
And to slightly misquote Al Gore’s keynote speech at the seminal 1994 Superhighway Summit “We have a dream for a superhighway that can save lives and create jobs for every person, young and old”. The High Street of 2020 is finally making the leap to deliver the information superhighway we were promised twenty-five years ago on that balmy day in the UCLA campus.
Christmas 2020 sales will remain strong, but customers and brands alike will be hitting the Highway and shunning the High Street.
So, as with all good Christmas tales let’s start at the beginning.
Almost three in four British consumers are reluctant to shop in-store in the lead up to Christmas according to research from Klarna and Retail Economics, with one in three claiming they will actively avoid physical retail spaces ‘as much as possible’ during the festive period. In parallel Bazaarvoice has reported that respondents choosing to visit brick-and-mortar stores has fallen from 56% to 44% in a year, with results showing an equal and opposite 11ppts swing from 45% to 56% for online retailers offering home delivery. Look further and research in July from Rakuten demonstrated that three quarters of respondents plan to primarily shop online during the festive period and Retail Gazette, citing data from Springboard, reported August retail footfall down by 31% YOY across all destinations, with the high street performing the worst with a decline of 38%.
The data-sources are multiple on people’s claimed intent, but what of their preparation? Lockdown proved that people can adapt, that humans could finally face-into the oft-ignored reality that digital transformation has always been 90% people and 10% tech. The anachronism of 9-to-5 living, and working has been trampled under-foot by the stampede to embrace the 168-hour week, where content can be consumed, and products purchased, wherever and however you like.
Make no mistake, people are ready to hit the Ecommerce Highway. Detailed analytics from AppsFlyer has shown a 35% rise in European ecommerce mobile app installs during local lockdowns, which is 12% higher than the peak of Q4 2019. This alleged ‘golden quarter’ was outshone time and again across multiple metrics in their work, and the figures are only going up. The data found a 61% increase in European non-organic installs between November 2019 and June 2020, and a further 56% growth between February and May of this year alone. In-app shopping sessions grew by 33% in the UK during the peak of the outbreak, with an 11% increase in the share of buying users compared to the Q4 2019 rush months of November and December.
We, as a nation, are ready for a retail revolution
We’ve been in-training throughout Lockdown, we’ve learnt to trust Ecommerce, the art and act of online purchase, how to receive deliveries when we’re not in, what to do when that jumper just doesn’t look right, and how chatbots really aren’t as bad as we thought they were.
The Highway is becoming a byway for success. Tesco’s pre-tax profits have surged 29% year-on-year with online delivery doubled to 1.5m weekly slots. Ocado has been named 2020’s fastest-growing UK brand in BrandZ’s annual Top 75 Most Valuable Brands report following a 63% growth in brand value. Nike’s digital sales grew by 82% to $3.7bn between June to August. ASOS, the brand tipped by many to have a terminal time just a few months ago, has seen sales rise by 18% year-on-year to £1.18bn with a 3.1m rise in its active customer base.
The High Street this Christmas will be very real. It will be right there, inviting us all in with the promise of cheer. The most real things for brands and customers won’t change. We will hunt for the special presents, the magical feast, that calendar of ponies that we know Auntie May gets every year, we will participate, buy and give just as we’ve always done. However, the most real of all these interactions between brands and their customers will be happening at home, on the highway, where none of us can see it.