Retailers optimistic about the festive shopping season

Retailers internationally are feeling “cautiously optimistic” about the festive shopping season, despite uncertainty around physical store openings and holiday sales patterns, according to research commissioned by Capgemini.

Almost half (46 per cent) of retailers are expecting an increase in sales and half of shoppers (49 per cent) say they will buy more online this season than in previous years.

In anticipation of this, 93 per cent of retailers have bolstered their online offering, with 50 per cent having improved their website or e-commerce proposition, 34 per cent increasing their web traffic capacity and 21 per cent introducing new virtual shopping experiences.

To further attract customers, 78 per cent of retailers say they will offer “greater discounts” both online and in-store, while a third (33 per cent) plan to offer a larger range of discounted products online.

However, despite these preparations, retailers are less confident that they can accurately predict sales patterns this holiday season compared to last year (39 per cent compared to 55 per cent in 2019).

The threat of lockdowns has been the leading cause of uncertainty (54 per cent), while half of retailers (50 per cent) blame supply chain disruption and almost one in three (30 per cent) say the data they base their planning on isn’t accurate due to COVID-19.

At the same time, only 14 per cent of consumers expect to spend more than usual this Black Friday, with just over a third (35 per cent) suggesting they plan to spend less. Less disposable income was cited as the main reason for this (43 per cent).

The biggest spenders this holiday season will be younger generations. More than a third (37 per cent) of 18-24-year-olds and 40 per cent of 25-34-year-olds say they have saved money since the start of the COVID-19 pandemic, with the intention of spending it around Black Friday and the holiday sales period.

Consumers in higher income brackets are also more likely to spend more this year than in previous years.

Compared to a global average of 14 per cent, 24 per cent of those on a salary of £64,000 and above plan to spend more.

Tim Bridges, global head of consumer goods and retail at Capgemini, said: “Retailers recognise that sales will shift online and have invested in their e-commerce offerings, with many businesses increasing payment options, opening up new delivery methods or bringing the in-store experience online through initiatives like virtual dressing rooms.”

He added: “With the ongoing nature of the pandemic, the uncertainty we’re witnessing today is likely to continue into next year. The real winners will be those that can digitally streamline their operations and supply chains, so that they can easily scale up and down to meet sudden surges and decreases in consumer spending.”

The retailer research was conducted among 851 retail managers across the UK, the US, Germany, France, The Netherlands and Scandinavia, in companies with at least 250 employees. The consumer survey was conducted among 6,588 consumers across the same six regions.

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