The holiday period was quite disappointing for most retailers. In fact, the latest BRC’s retail sales report found that non-food sales contracted 1.4% y/y in the last quarter of 2017. This marks the biggest decline of this measure since the crisis days of 2009.
According to experts, some retailers failed to encourage shoppers to spend during the busy festive period, but those that place a focus on loyalty and personalised bargains will prosper most.
Christmas shopping: mixed bag results
Rob Meakin, Managing Director at Loyalty Pro, commented: “Retailers’ Christmas results paint a mixed picture as the likes of Tesco, John Lewis and supermarket chain Waitrose all vied for the customer’s interest during a busy period. The influence of peak retail periods such as Black Friday shouldn’t go unnoticed, however, with retailers fighting against the customer’s reluctance to spend, especially as budgets tightened and prices continued to rise. Regular Christmas deals are no longer enough to thrive in the competitive market but the ‘membership economy’, where customers feel part of an exclusive club through personalised deals, can help drive footfall and sales. Securing the customer’s loyalty is the biggest challenge facing retailers in 2018 and a personalised strategy will trump all other approaches.”
Personalised approach for greater loyalty
Meaking further explained: “A personalised approach can add instant value to each shopping experience, while loyalty schemes can extend the entire journey and help build a long-standing relationship with the customer that encourages growth during all periods in the calendar. It’s also likely the reason why Tesco and John Lewis enjoyed strong festive sales; Tesco’s Clubcard & John Lewis’ membership card enables both to build a long-standing relationship with customers, where they can send them tailor-made deals based on purchasing history over the year. But smaller and more local retailers can also compete by offering their own loyalty schemes that use the latest in customer data analytics and personalised bargains.”