The cost of a white Christmas

23 12 2010
Shopping centre at Christmas

Retailers have suffered due to the bad weather

Christmas trade this year has taken a blow because of the weather.  At first we had reports that bad weather had deterred shoppers in early December because they couldn’t get to the shopping centres.  The main beneficiaries (for once) were small retailers, as more of us shopped local.  Then just as trade started to pick up again, there was more snow.  This time it reached such cataclysmic depth that Brent Cross Shopping Centre in London was forced to close its doors on the busiest Saturday of the year because of fears for safety in the car parks and of staff trying to get home after work.  All this has given a boost to online shopping, which has already enticed more and more of us away from traditional shopping.

At lunchtime on Monday 7th December – termed “Mega-Monday” in the trade – almost £1 million was spent in one minute for the first time ever online.  The surge is a result of customers receiving their November pay and ordering in time for delivery before Christmas.  This year the weather has created extra impetus.  But alas, in a cruel twist of fait, online customers and sellers are now concerned that goods won’t arrive on time because of an enormous backlog that has built up in both supply and delivery.  Will there be a last minute rush for the shops as we try to compensate for the lack of gifts to pile under the tree?

So amid all of the turmoil, who have been the winners and losers?  eBay has outstripped rivals Amazon in growth of online sales – which is good news for all the many small traders who sell on eBay.  Darling of the High Street this year, without a doubt, has been John Lewis for whom sales have grown consistently high in spite of all.  Fashion, gadgets and electricals, and toys have all performed well, both in-store and online.   Poor performers however have suffered not just because of weather. Consumer feedback suggests that goods being out of stock, confusing layout, blocked aisles and poor customer service have all contributed to an early start to the ‘January’ sales in many outlets.

And as for the battle between online and retail – well the jury is still out as to which works best.  But before making any drastic decisions, it’s time to reflect that the real winning strategy is to combine different retail channels, so that customers can research products, prices and availability using different media, and enjoy the shopping experience of their choice and according to conditions.  Another thing to consider – well, with one of the top selling gadgets this year being smart phones -you can rest assured that mobile phone shopping will be more important next year.

So, if you are in the business of selling to the public, by e-tail, retail or even mobile technology, now is the time to re-think your strategy going forward.  To help with this, Nottingham Trent University’s Future Factory project has teamed up with Clare Raynor, “The Retail Champion” to run a pair of workshops – on Monday 7 February 2011 and Monday 21 March 2011 – aimed at exploring retail strategy and using new technologies to market your products and services.

Finally, here are some recent reports from the press on the cost of a white Christmas for some retailers and plans for 2011;

Retailers have lost tens of millions of pounds after snow devastated what was supposed to be the busiest shopping day of the year a week before Christmas. Blizzards and icy conditions meant many shoppers abandoned their trips while some stores were forced to close. Brent Cross shopping centre in North London, one of Britain’s biggest, was forced to close on Saturday afternoon, losing trade worth up to an estimated £5m. In some supermarkets there were long queues and empty shelves as shoppers began to panic buy amid fears food supplies would not reach stores in time for Christmas. The Telegraph 19/12/10

Stores have launched early sales in a bid to counter the big freeze, which threatens to wipe out Christmas trade.As many as 10million people are expected to hit the shops today, provided they are not frozen in. Big names such as Laura Ashley, Gap, French Connection and B&Q have begun ‘winter sales’ with reductions of up to 75 per cent, while others are filling shop windows with promotions. Mail on Sunday 19/12/10

Britain’s biggest department store chain, John Lewis, will invest record sums in the business next year, despite concerns over Government spending cuts and council job losses. The board of John Lewis Partnership, which owns John Lewis and Waitrose, has earmarked £250 million for initiatives that include new stores and improving the online John Lewis Direct arm. John Lewis managing director Andy Street said: ‘We believe there are a lot of opportunities for the brand and we’re investing in the long term. Mail on Sunday 19/12/10

Boots is to expand its drive-through pharmacy format following a successful trial in Colchester. Boots, part of Alliance Boots, sees large growth potential in the UK for the format, which is already established in the US, where there are more than 3,000 sites. The format – like a McDonald’s drive through – allows customers to drive up to a window where they can drop off or pick up prescriptions rather than queuing to go into the store. It has just agreed a deal with British Land, its landlord, to open a store and drive through at St James Retail Park in Northampton. Due to open next May, the 4,500 sq ft store and pharmacy will be the second of up to 20 it plans to open over the next few years. The Independent 19/12/10

Lynn Oxborrow

Lynn Oxborrow is Senior Lecturer in Marketing, Retail and Operations at Nottingham Trent University
To speak with Lynn directly, please call Nottingham Trent University’s Press Office on 0115 848 8751 or email christmas@ntu.ac.uk

To book a place on the retail workshops, please contact Angela Scott on tel: 0115 848 8675, or email futurefactory@ntu.ac.uk.  Learn more about Clare Raynor on the Retail Champion website

Future Factory is part funded by the European Regional Development Fund and aims to support East Midlands Based small to medium sized companies (SMEs) improve their business sustainability through better design and business processes, see www.ntu.ac.uk/futurefactory