It’s that time of year – the weather has turned cold, the John Lewis Advert has arrived and all of a sudden the season of gift-giving is once again upon us. Christmas has always been a lucrative period for retailers, however this year comes another prediction of increased consumer spending that is set to reach record numbers. These forecasts are only early estimates, however it seems that the power of multi-channel retailing is once again pushing consumers to spend more and generate unmatched revenue for businesses across the UK.
One of the reasons for this is that the story of this Christmas, and indeed the last few years, has been the ever-growing impact of online trading and the emergence of this as the preferred gift shopping medium for today’s buyers. With the bigger crowds and queues in high street stores around the festive period, the appeal and convenience of online shopping over Christmas seems to only be strengthened as each year progresses. This has been highlighted in recent evidence sourced by Adobe Digital Insights (ADI) who have forecasted that consumers will this year spend a sizeable £24.6 billion online, 10% more than they did in 2015.
Huge Black Friday Spending Predicted For November 2016
There are a number of key factors pushing this increase, the first being the growing significance of Black Friday. Despite research showing that many retailers and consumers in the UK are set to avoid the traditional post-Thanksgiving shopping bonanza this year, the numbers tell a different story. The same ADI study has predicted that Black Friday 2016 will be the biggest single online shopping day in the UK in the run up to Christmas this year, with spending expected to reach £901 million on the day of Black Friday alone. PCA Predicts are also forecasting an increase of 20-25% online transactions on Black Friday, with more than a massive nine million orders to be placed over the course of the day.
However Black Friday is quickly becoming not just a one day event, this year we have also seen large retailers use the Black Friday title to push the exclusivity and limited nature of their festive deals. One prominent example has been online giant Amazon having a 14-day Black Friday event this year to encourage buyers and drive sales during the build up to the day itself.
The Growing Influence Of Mobile Commerce
That said, the increased interest and growing number of online bargains over the Black Friday period isn’t the only thing driving up online spending. Revenue from mobiles has been another major factor that has been gathering momentum in recent years, with this year set to generate the biggest to date. Based on analysis of past shopping data from 13 different countries, the ADI study found that a massive 20% of online Christmas shopping is expected to be conducted via mobile commerce in 2016. This was then validated by PCA Predict finding that 50% of total eCommerce transactions on Black Friday this year will be completed via mobile. However somewhat surprisingly mobile spending will actually peak on Christmas Day itself rather than Black Friday, suggesting that consumers will be logging on and placing orders to grab themselves a bargain before the traditional Boxing Day rush.
So with this recent evidence pointing clearly to the growing significance of Black Friday and Mobile Sales in driving revenue over Christmas, the big question is what can businesses do to capitalise on the increasing sales opportunities that these factors will continue to create in coming years? The answer for both lies in comprehensive multi-channel order management.
Even if businesses are not set up to sell their products cross-platform currently, the importance of being multi-channel is only going to intensify in the next few years until it becomes truly essential. Therefore if companies aren’t already set up or have plans in place for a sales strategy that incorporates selling cross-platform across multiple sales channels, they could soon see some stagnation in their business growth.
How Your Business Can Capitalise On Increased Online Spending During The Festive Period
However those that already have multi-channel operations in place should be looking at ways that this can be optimised towards mobile sales. One key way this can be done is ensuring their website is responsive so that consumers looking to purchase from them online receive the same first-class buying experience regardless of the device they are using. By having an eCommerce website that can be automatically optimised for mobile device users, companies can make sure that they can capture more sales over the increasingly busy festive period.
That said, having a responsive website on its own isn’t enough. Businesses need to ensure that they have the necessary back office infrastructure in place to effectively service these orders so that customers receive the speedy, accurate fulfilment they have come to expect. Without a sound solution in place to help automate the processing of these online sales orders and keep information correct and up-to-date, companies can find themselves unable to cope during the hectic Black Friday and Christmas season. This can then result in late deliveries, oversold items, increased returns and ultimately, let down customers.
Leaving themselves susceptible to these issues has led to businesses somewhat rightly being sceptical about the profitability benefits of Black Friday. In fact, recent research by Future of Retail has found that 61% of UK traders questioned saw Black Friday as an unprofitable and unsustainable promotion, an increase from the 32% in 2015. However often the profitability of Black Friday for businesses lies in how well they can manage picking, packing and shipping during these operational peaks and also minimising the costs of any subsequent returns.
Make Black Friday Manageable & See Your Profits Soar
Obviously companies can take a leaf out of Amazon’s book and spread their promotion over several days, so as to avoid any logistical nightmares caused by excessive order volumes on a single day. However even if businesses choose to not actively participate in Black Friday, the increased online activity may still lead more people to come across their products on their website or marketplaces when searching for the lowest price. Therefore it makes sense for businesses to arm themselves with the tools to maximise their gains from Black Friday, ensuring they are well prepared for processing larger order volumes during this period.
The best way for businesses to achieve this is to have full integration between their online channels and back end order processing system, allowing orders to be automatically imported from across all channels and seller accounts from a single centralised platform. Then with an accurate and efficient method of picking these orders and sending the necessary details over to couriers without needing to retype, businesses will find that they can comfortably process higher volumes during seasonal peaks. More importantly, they will be delivering to customers on time and in full which will in turn minimise the number of returns and the associated costs.
However returns are inevitable over the Christmas period due to the possibility of duplicated or ill-fitting gifts, so businesses also need to ensure they have an accurate, structured method in place for processing the returns that are generated. This is particularly important for fashion and apparel retailers as returns can be as high as almost two thirds of orders at Christmas time. By keeping careful track of these returns volumes and ensuring they are credited in a timely manner to the customer, businesses are able to get merchandise quickly back on sale and avoid the risk of products having to be reduced in price. Using this structured handling to minimise both the volumes and costs associated with returns, businesses will find that their Black Friday and Christmas promotions can be a profitable success.
So in conclusion, it is clear that mobile commerce and more online sales are having an increasingly large impact on revenue over the Christmas period and will continue to do so in the coming years. If businesses are to make the most of these extra sales opportunities being presented, they should ensure they have the mobile-optimised website and effective multi-channel order management system to fully capitalise.
To find out more about OrderWise’s Responsive Websites and Multi-Channel management including listings for eBay, Amazon and Google Shopping, visit this page HERE.
To discuss your requirements in more detail, contact us today on 01522 704083.