Are retailers in for a surprisingly good Christmas?

By Nick Vile, General Manager, oOh!media New Zealand 

It’s fair to say we’re all looking forward to the end of a difficult 2020, but new data suggests that retailers in particular might be looking forward to December for another reason. 

Data from an independent Perceptive Omnibus survey commissioned by oOh!media suggests that Christmas spending could hold up better than expected. While we must still be cautious, the numbers suggest retail audiences are bouncing back as people become more confident after a tough few months. After seeing shops shut and jobs lost, it’s a potentially positive bookend to the year for an industry that traditionally employs around 10% of our workforce. 

Data shows optimism 

One of the key lessons from 2020 is how quickly Kiwis have bounced back after lockdowns. According to Paymark data, following the first wave of COVID we saw the Consumer Total Spend Growth Rate return to positive immediately, and stay there for three months until the second wave hit. Now the second wave is easing, the data shows retail consumer spending in early September was about where it was prior to the second lockdown, and has not dropped off – there is real resilience in these numbers. 

Source: Paymark consumer spend trends October 2020 

Echoing this trend, consumer confidence also rebounded and rapidly regained over half its first wave loss, while business confidence showed a similar pattern with a steep initial loss followed by a quick recovery after the first wave. 

Dataventures’ information reveals that retail foot traffic was consistently above the prior year after the first wave and before the second one, with numbers solid through June and July. This had an impact on retailer confidence, which according to Stats NZ was positive in July, building on the strong rebound recorded in June after lockdown was lifted. In fact, 75% of retailers responding to a Retail Radar survey reported feeling confident or very confident their business will survive the next 12 months, up from just 39% in May. 

While government and financial institutions have stepped up to help people, an intriguing reason for the renewed optimism relates to the closure of international travel – it seems the $ 9 billion Kiwis spend every year on foreign travel is being spent on other categories such as electronics, shoes and clothing, cars, housing, DIY and domestic holidays. 

Preparing for Xmas spending 

Against this backdrop, Christmas 2020 will be one of the most important seasons for many years. Retailers will be looking to make up lost ground and claw back revenues missed during the dips in April and August – and from the data, consumers look ready to help. 

oOh!media recently conducted a survey regarding end of year spending intentions, and the results were encouraging. Around 38% of respondents are looking to purchase on Black Friday, and 21% on Cyber Monday. The planned total average spend across both days is $ 145, versus just $ 79 last year, representing an 84% increase. 

Moving into December, 42% of respondents were looking to make purchases during the Boxing Day sales, including 60% of 25 to 34-year-olds. The planned spend is $ 142, with business owners / self-employed and students looking to spend more, at $ 148 and $ 174 respectively. In general, Kiwis aged 45 and above are planning on spending $ 130 in the Boxing Day sales, versus their usual $ 123. 

This is good news for shopping centre owners and their tenants. Destinations such as Kiwi Property’s new Galleria expansion at Auckland’s Sylvia Park, for example, look well placed to capitalise on these spending intentions. 

Showing the benefits of having an integrated marketing approach, nearly two-thirds (64%) of New Zealanders research online prior to buying in store, with this being highest among 25 to 34-year-olds at 77%. With the challenge then being how we encourage online search, Out of Home has been proven to be the most effective channel at driving online activity. 

Advertising to reach consumers 

Advertising will play an important role this holiday season, especially as most Christmas purchases are considered and researched well in advance. Women especially are almost twice as likely than men to be purchasing two months out, implying that early action should be taken. Having said that, one third of people still leave their Christmas shopping until late, and 55% say they are influenced to buy more at Christmas by advertising. This highlights the importance to advertisers of being present throughout the last few weeks of the Christmas rush. 

Scale and frequent touchpoints will be crucial in reaching and priming consumers, so street-based advertising in combination with retail media should form an important part of any campaign. As mass reach and high frequency channels that reach consumers regularly throughout their daily routines, these channels complement each other by priming and influencing consumers throughout the often lengthy consideration process right through to the final point of purchase. 

While online purchasing has grown over COVID, 89% of purchasing still happens in physical stores and both street-based and retail Out of Home assets allow advertisers to get as close to the point of purchase as possible. Integrated campaigns are therefore highly effective, and form a crucial bridge between the journey and point of sale. A 2019 oOh! study conducted by researcher Market Knowledge found that using Street Furniture and Retail in combination increases brand impact by 43%, brand engagement by 62%, and purchase intent by 23% versus using street or retail alone. 

All this suggests that retailers and brands have a real opportunity to capitalise on improving consumer confidence and audience numbers to make the most of the upcoming shopping season. Christmas spending could well be the big economic surprise of 2020, especially if the health situation continues to improve. Hopefully everybody can enjoy the final few months of 2020 and look forward to better times ahead. 

The post Are retailers in for a surprisingly good Christmas? appeared first on stoppress.co.nz.

stoppress.co.nz