Principal Business Consultant
Christmas is almost upon us, and in the build-up to the big day, retailers have been working hard to win sales from shoppers who still have some cash left over from Black Friday. In fact, it’s now a last-minute rush for retailers to drive sales in the penultimate week, as we’ve seen with many brands slashing prices and launching sales already. When will it stop?
This year is highly competitive, as ever, particularly given the success of Black Friday and the current challenges seen on the UK High Street. However, with more shoppers willing to part with their money over the festive period (Brits on average spend £567 on Christmas presents), it’s still a great time for retailers to drive their sales performance, win over new customers and set themselves up for success in the New Year.
A major challenge that retailers often face over this busy period is balancing the introduction of new, in-store concepts to create a different and exciting environment for customers, whilst also keeping the cogs turning, ensuring operations run smoothly and that the basics are spot on. Introducing anything new or complex can be a real distraction for stores – and if it all goes wrong, it’s anything but engaging for customers.
Within this article, we explore some of the strategies that we’ve seen retailers adopting to engage customers over the festive period, including how they build emotional connections with customers in-store, the fun promotions used to encourage shoppers to purchase and the innovative product lines they’ve launched.
Christmas is a great time to build relationships with customers and get them to buy into your brand, driving customer lifetime value upwards. Physical retail really comes to life at this time of year, with many retailers attempting to create feelings of warmth and happiness which funnily enough, encourages shoppers to spend more money. However, with a bigger share of Christmas shopping being carried out online each year (online sales accounted for 20% of all retail sales over Christmas in 2018 – the highest share ever), it’s no surprise that retailers are putting in the effort to entice customers into stores and off of their phones by offering experiences that digital simply can’t offer.
Department stores often do a great job of creating the Christmas ambience; making use of their extensive square feet with their displays in-store and across the windows of London’s West End. Fortnum & Mason gets our winning vote this year, with their beautiful displays at the front of their flagship, which we felt really embodied the F&M brand and made us feel very festive! Harrods too continues to draw crowds in with their Christmas shop and grotto, where families book weeks in advance to meet the big man himself (once they’ve qualified by spending at least £2000 in-store!).
However, it’s not just in-store where the department stores seek to make an emotional connection with their customers, but through their advertising too. John Lewis is famous for its Christmas adverts, but one that caught our attention this year was Selfridges, who went one step further and developed a short film called Future Fantasy: A Christmas for Modern Times. It tells the story of an alternative family coming together at Christmas time to deliver the message that Christmas is about being surrounded by family and friends, regardless of the shape and make-up of your family. Whilst this didn’t exactly make us want to run out to Selfridges to finish our Christmas shopping, we enjoyed how Selfridges has taken a more inclusive approach to Christmas, moving away from the idealistic scenes that other retailers depict in their ads over the festive period.
Another tip of the cap must go to The Entertainer for its focus on inclusivity over the Christmas period. The toys and games retailer introduced a ‘Quiet Hour’ across all 171 of its stores, in a bid to create a more relaxing and enjoyable shopping experience for those with autism. Stores will switch off the music and dim the lights for one hour at the beginning of every day in the lead-up to Christmas. Staff working in The Entertainer stores have also been trained to help customers who may suffer from sensory overload.
We really like this idea: instead of encouraging over-spending at this time of year, The Entertainer has focused its efforts on making Christmas shopping more accessible for all. A great initiative!
Similarly, Amazon and the Co-op have also got into the true spirit of Christmas this year as they donate thousands of items to charity. Whilst not a direct engagement technique by retailers, it certainly gets the attention of consumers in the market to improve brand perception.
Taking a different approach to take the stress out of Christmas shopping for customers, Boots introduced interactive ‘Bootiques’ which split present ideas into groups, such as Sleep, Love, Beauty, Veganism, Fitness and ‘Tweens’. Boots hopes that by creating these categories, shoppers will find it easier to select gifts, and will find it easier to navigate and less daunting as a result.
Whilst we felt that this was a great idea in practice, it wasn’t entirely well-executed. The vegan section and fitness section were fairly helpful; however the ‘tween’ Bootique took an incredibly restrictive view on a teenager. With all gifts aimed towards girls and grouped into themes that Boots assumes a teenage girl will enjoy: Harry Potter, Disney and Unicorns – not particularly helpful for those parents whose daughters aren’t particularly girly.
Another strategy that retailers are adopting over the Christmas period to engage customers is through fun and innovative promotional campaigns. One example we enjoyed this year was lingerie retailer Boux Avenue, who introduced an advent calendar-type Christmas campaign for all customers this year. The underwear company is offering a different discount or deal on products each day of December, such as matching sets for £20 or 20% off selected lines.
Other brands have used the ’12 days of Christmas’ as a campaign to offer 12 different offers over the 12 days, such as Wilko, Vision Direct and even Burger King, who offered a ’12 days of whoppers’ deal for those real die-hard whopper fans!
Introducing a different deal each day keeps it fun and exciting for customers who are waiting to see what offer lands in their inbox the next day and can encourage cross-selling across ranges. The key risk here is promotional fatigue from shoppers who are overloaded with offers at this time of year – and can often end up ignoring your communications altogether as a result.
Sainsbury’s took a different approach this year, by launching a wide range of Christmas-themed products for pets in over 300 of their stores – including mince pies and Christmas jumpers for dogs, and turkey mousse for cats. Sainsbury’s have recognised how their customers see their pets as one of the family (with over half of Sainsbury’s shoppers owning a pet), not to mention the pet market which is now valued at a cool £4.4 billion.
For me, this is an example of a retailer who has not only listened to their customers and developed an initiative which is relevant and meaningful, they’ve also tapped into a lucrative commercial opportunity which is getting some positive PR over the Christmas period. The real proof will be in the (dog-friendly, Christmas-themed) pudding!