Retailers, are you peak season ready?

8 min read

Latest research shows retailers are chasing reduced spend!!

The latest Peak Season Report 2023 from Auctane has revealed that three in four UK households are planning to cut back on non-food spending this Christmas compared to last year, with most saying they plan to shop wisely by utilising price deals around sales events like Black Friday/Cyber Monday.

With austerity still top of mind and inflation high, albeit coming down slightly, retailers need to act smartly to make the most of key events and maintain share during tough conditions.

Not only does that mean having the best deals and the right stock in the right places but it also requires up to the minute information to deliver a seamless experience to new and existing customers alike. It’s a big opportunity but also a big risk if you get it wrong which you may pay for as the new year progresses in terms of lost potential.

Tough times ahead

The on-going cost of living crisis means that UK consumers are not feeling flush this year, and  with households set to be £109 worse off this Christmas compared to last year, there is a strong inclination to hold back. And all demographics are effected.

The research shows a step change in the proportion of middle and higher income households planning to cut back, with cost of living concerns now going beyond the least affluent. Higher interest rates are increasing pressure on middle class consumers, including those with mortgages and student debts.

Caution and uncertainty

UK consumers have experienced the highest levels of inflation across the countries covered in the research and continue to show intentions to either cut back, trade down or fiercely manage budget. Caution has become the default in these uncertain times and retailers need to be flexible and agile in order to respond.

Retailer sentiment

Interestingly merchant expectations are slightly more positive with almost two-thirds of online retailers expecting sales volumes to be broadly aligned with last year and 13% expecting sales volumes to rise. Business confidence may be higher than last year but any difference  between business and consumer optimism could mean retailers are left with excess stock.

DIY and electricals are most at risk from consumer cutbacks, reflecting a subdued demand for big-ticket items and home improvement, as borrowing costs rise. Meanwhile health and beauty and apparel are proving the resilient sectors.

Astute tactics put focus on Sales Events

Consumers are set to shop more strategically this year, focusing for example on promotional events like Black Friday and Cyber Monday, setting a budget and picking value brands. Shopping for gifts early to spread the cost is also a factor, so being ready right now is critical.

Omni Channel thrives

While over half of all shoppers plan to make their purchases online the Omni Channel era has well and truly arrived with many brands no longer making a distinction between online and in-store. Consumers happily move between digital and physical channels but they want the experience to be effortless as they browse online, order via apps, and collect in-person for example.

Christmas is a prime opportunity for retailers to win new customers and build loyalty with existing ones. While cutbacks mean the cost of online delivery is a big factor there are other issues at Christmas time including the flexibility and convenience of returns, speed of delivery and visibility of the parcel journey.

Putting your warehouse systems to the test

All this adds up to one thing – Christmas is a stress test for your systems! If they are overwhelmingly manual or outdated you are going to struggle to make the most of this busy period.

During the busy season the ability to see exactly what is going on across your warehouse in real time is vital – from stock levels to picking, packing and shipping.

So it’s time to ditch pen and paper and bring your order fulfilment into the 21^st Century with a fully digital system which seamlessly integrates into your ecommerce & ERP/Business System​.

Our one stop solution is called Modulus 365 – the only Order Management System (OMS) you will ever need. It integrates with your current finance or ERP system and offers retailers like you end to end transparency over all their processes. Benefits include;

• No manual processing of orders & no oversold stock.​
• Provides best Pick Pack Ship function that fits your Warehouse / Operations.​
• Integrates with Carriers of your choice (no more double keying)​
• Process Order Returns (self-service) with ease. ​
• Upon receipt, Quarantine or QC & put back in stock.​

• Customisable & Configurable Order Orchestration

This cost effective solution allows you to get more fulfilment performance from your tech and staff costs. You will benefit from improved, more consistent customer service – get a reliable home for your data which supports marketing initiatives like personalisation and subscriptions and allows you to become a true Omni-Channel retailer even though you might be a fraction of the size of Amazon!.

Conclusion

At the start of this report we reminded ourselves that the Christmas holiday period is a golden opportunity for retailers and that if you understand the impact of ongoing economic uncertainties on spending behaviour you can begin to position yourself for success.

Consumers are entering the festive period ready for a good time but in highly budget conscious mode. Savvy retailers understand that digital readiness will allow them to ride the conditions and capitalise on the opportunities to win customers and strengthen loyalty.

Now pair that knowledge with the truly helpful benefits of a cutting edge digital OMS/WMS system and you can begin to make the transition to being really world class.

We would love to help! Please contact us HERE (link to contact us page) to find out more about the system or to request a demo.

Handy Summary of Key Points from the Survey

• Half to three quarters of all consumers intend cutting back or spending less this Christmas.
• Nine in Ten (91%) consumers are concerned about economic prospects and their personal finances heading into the Peak Season up from 87% last year.
• 46% of women plan to shop during promotional events such as Black Friday or Cyber Monday.
• As many as 54% of shoppers plan to start shopping for the holidays before Black Friday
• Half of all shoppers expect orders to arrive within 2 days
• Flexible returns and visible tracking are priorities for shoppers
• 44% of digital natives (under 45) intend to engage in their festive shopping during promotional periods like Black Friday and Cyber Monday
• 57% of shoppers plan to do their shopping online
• Nine in ten (88%) shoppers plan to shop on online marketplaces like Amazon