2016 was a turbulent year for UK retail but at last there’s something to celebrate.
Over the past couple of weeks, scores of brands – from high street stalwarts John Lewis and Debenhams to online specialists Asos and Boohoo.com – have been announcing unexpected uplifts in Christmas sales.
Christmas has long been the biggest event of the British retail calendar. But in the eyes of marketers, for a multitude of reasons, it has been waning. Christmas 2015 saw high street footfall drop for its fifth consecutive year. Online has been better – but is increasingly under threat from new shopping events like Black Friday and Singles Day.
Economically speaking, 2016 was exceptionally bleak. Consumer confidence suffered major blows and Christmas retail forecasts were, unsurprisingly, pessimistic. However, these latest reports suggest a turn-up for the books.
What’s particularly surprising is Christmas shopping behaviour seems to have changed. In recent years, many retailers attributed Christmas sales to their online offerings and food ranges, but 2016 saw struggling areas of retail start to recover.
M&S, for example, saw like-for-like clothing sales rise by 2.3% in the 13 weeks to Christmas, compared to a 6% dip the previous year. High street footfall increased by 0.8% from November 27 to December 28, with John Lewis’ department store sales rising by 2.7% during the six-week run-up to Christmas.
Once predictable, Christmas has become a confusing time for marketers, and these retail reports are equally difficult to draw conclusions from. Do they mean consumer confidence is on its way up? If footfall is increasing, is online really the answer? Will the good feeling last?
How to get into the right mindset
Paul Martin, head of UK retail at KPMG, believes Brits defied the “mood music” of 2016 and saw Christmas as a way to treat themselves and celebrate. By better understanding the mindsets of shoppers – what they’re looking for and what they lack – marketers can tailor products, services and messaging to cater for them. We only need consider the 200,000 lobsters Lidl sold – thanks to a social media campaign that drove prices of the crustacean down in conjunction with the number of tweets it received – to understand the potential power of being in tune with what customers want.
Martin’s interpretation of Christmas 2016 directly correlates with a report we recently conducted to understand what motivates shoppers today. Beyond Demographics uncovered seven mindsets – conscious, creative, fulfilled, influential, knowledgeable, secure and sociable – that can better account for shopping behaviour than traditional segmentation methods.
These mindsets aren’t defined by demographics like age, gender and income. An 18-year-old student is just as likely to be creative as a retiree. Instead, mindsets differ according to what people are seeking to buy, which channels they are shopping in, and what’s happening in their day-to-day lives.
Utilising our research, we were able to establish the key mindsets at play at Christmas. By using them as a framework to shape business decisions, retailers will be better placed to replicate their recent successes next year. So, what are they?
Sociable
A sociable shopper is someone who seeks connections with others and wants to belong to a group. They value sharing and putting a smile on people’s faces. When they buy, it is to win others’ affection and nurture the meaningful relationships they have with friends and family.
Marketers should use these characteristics to enhance Christmas campaigns, particularly when consumer confidence is low. Coca-Cola Brazil’s Christmas video campaign, which followed the brand’s long-running theme of “sharing”, is a great example of this in practice. Meanwhile, Sainsbury’s “The Greatest Gift” campaign, which encouraged fans of its bespoke Christmas song to sing along via Snapchat, shows how sociability can be scaled up using digital media.
Creative
People in the creative mindset appreciate beauty and search for aesthetics. When they buy, it is to gain innovative things that they enjoy. Cadbury’s #Cadvent calendar, an interactive digital calendar featuring 24 different videos, was a clever way to capture creativity and inspire people throughout the festive season.
Fulfilled
A fulfilled shopper aspires to be the best possible version of themselves, and to live a full and satisfying life. They look to inspire others and seek good experiences with them.
As emblems of indulgence, food and drink are often used to connect with people in the fulfilled mindset. But marketers could look to find alternative ways to encourage fulfilment beyond quick fixes in the festive season. As purchasing decisions continue to be more geared towards improving personal wellbeing, for instance, could brands extend their luxury offerings across the year?
The jury’s out on whether Christmas 2016 is a taste of things to come. As consumers continue to surprise us, the retail industry needs to be aware that 2017 could look very different. But the proof is in the pudding. To better their chances of replicating success, brands need to monitor the mood of their customers across the year, tailor their festive campaigns around these insights and always be mindful of mindsets.
By Chris Cooper, head of planning at smp