Mazars retail update – The importance of a multi-channel approach

31 January 2018

The ONS’s UK retail sales bulletin for December reinforced a few themes those involved in the sector had long suspected.

  • With sales volumes for the month falling by 1.5%, a shift in spending from December to November - to take advantage of Black Friday offers - is evident;
  • The trend towards online spending continues, almost one in every five pounds spent is now done so online;
  • With retail sales for Q4, typically the peak Christmas period, being only 0.4% higher than Q3, consumers continue to be mindful of their spending.

 

In short, with inflation outstripping wage increases, shoppers are increasingly savvy in making what they have stretch further.

By searching and comparing online, consumers know where they can buy what they want cheapest.  We also know many prefer to ‘try before they buy’.  Some of the better performing businesses over the Christmas 2017 season – Next, Fat Face and Joules – were those offering a multi-channel approach.  This approach allowed customers to view goods in-store before buying online and taking advantage of discount offers, whilst also providing the option for customers to return their on-line orders directly to stores.

Although there are signs that wage growth is improving and a view that inflation may have peaked, it’s unlikely the continuing move to online shopping will reverse. 

For this reason, those retailers offering a multi-channel experience appear most likely to succeed over the longer term. 

Retailers which have recognised (or are moving to address) this will undoubtedly be the most attractive M&A investment opportunities over the coming years.  

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