Recent reports and articles spin a woeful tale for 2018 retail and in the wake of even more economic uncertainty surrounding Brexit, it’s hard to say whether this year will be any less tumultuous.
Last year, there were over 1,250 retail store closures on Britain’s high street – among them were Toys R Us and Maplin, which both went bust, while several chains announced store closures in the wake of financial difficulties, including Mothercare and House of Fraser.
And sales on Black Friday were disappointing, despite it being a key event in the retail calendar. The heavy discounts inevitably claimed some early Christmas spend, bringing forward retail purchases to November from December but it “fundamentally made no significant difference to the success of bricks-and-mortar destinations” and has even been blamed for “ruining Christmas on the high street”.
Times were already tough, but December 2018 was particularly challenging, with UK businesses experiencing their worst Christmas in a decade. According to Retail Week, footfall deteriorated rapidly in the weeks before Christmas, as shoppers reined in their spending due to mounting debt and low confidence.
In the week following Christmas, footfall rose slightly when compared with last year, with the extended squeeze on purchasing power encouraging consumers to seek bigger discounts than those available pre-holiday. But, Boxing Day continued to lose its significance as a trading day, with reports declaring a decline in the number of shoppers heading to the sales across the UK for a third consecutive year.
With the shaky political and economic position we’re currently in, and the ever-larger looming threat of a no-deal Brexit, retailers are going to have even more to contend with in 2019 – and it’s already been a challenging start to the year, with businesses scrambling to make up for such poor sales over the festive period.
It’s hard to predict what the retail landscape will look like in just a couple of months’ time. So, what can bricks and mortar retailers do to ensure they survive to see Christmas 2019?
Despite the fact that fewer in-store shoppers means retailers need to do more to increase transaction value, discount and value-driven retailers appear to have bucked the gloomy trend for dwindling sales, offering low-cost options in a time where consumers are wary about splashing the cash – with stores like Primark becoming one of the main draws in many shopping centres.
On the other end of the spectrum, luxury department stores such as Harrods and Harvey Nichols have been boosted by increased sales in spite of the climate, by offering customers in-store experiences such as brand popups, make up masterclasses, and even wine tasting.
The idea of destination retail is also on the rise, where shoppers have access to shops, dining and leisure, all under the one roof. In fact, King Cross’ brand-new Coal Drops Yard – featuring a mix of independent and signature brands, including Nottingham’s own Paul Smith, and an all-new dining scene – has been described as the “experience-focused blueprint for new model retail”. With the knowledge that more needs to be done to coax consumers out to visit shops, events and experience are central to the retail hub, with the focus shifted away from the idea of shopping, and into a wider sense of public space and enjoyment.
As experts in retail and events PR, The Tonic knows how well an experiential focus can drive footfall and sales, having managed in-store events for Julien Macdonald and Joules, as well as bagging great results for over 120 nationwide Vision Express launch events within Tesco supermarkets. For us, it is clear that brands investing in experiences, rather than products, are in for a more successful, and profitable 2019.