webloyalty easter retail 2014 report introduction
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Interesting introduction and summary from Webloyalty and Conlumino about the Easter Retail Report 2014. The report reveals important economic metrics as well as consumer trends.TRANSCRIPT
LOOKING AHEAD… EASTER RETAIL TRENDS
WEBLOYALTY & CONLUMINO
MARCH 2014
Page 2
Introduction
© 2014 Webloyalty & Conlumino [email protected] | 020 7291 8720
Looking ahead ... Easter March 2014
Webloyalty 19-21 Great Portland Street W1W 8QB 020 7291 8720 [email protected] www.webloyalty.co.uk
Conlumino 7 Carmelite Street, London EC4Y 0BS 020 7936 6654 [email protected] www.conlumino.com
This research has been commissioned by Webloyalty to provide retailers with insight into the current trading environment as well as some more specific insight around the Easter occasion. About Webloyalty Webloyalty is a leading reward programme provider working with major online retailers to help them build stronger, more profitable relationships with their customers. Through our membership programmes, such as Complete Savings and Shopper Discounts & Rewards, we help our online retail partners’ customers save hundreds of pounds a year while providing the partner with an additional revenue stream. As well as incentivising customers to make repeat purchases at the partner’s site, they can also earn cashback and get great deals on everything from fashion to electronics to travel at hundreds of top online stores. Webloyalty was established in the UK in 2007 and has since expanded into France, Germany, Spain, Italy, Ireland, Brazil and the Netherlands. About Conlumino Conlumino is a retail research agency and consulting firm. Our work focuses on all aspects of retailing and consumer behaviour, which we deliver through bespoke reports, projects and presentations. We work with many of the world’s leading retailers, property firms and those in the financial sector to help them maximize success through developing a thorough understanding of the sector and its likely future performance.
Foreword
Page 3
Introduction
© 2014 Webloyalty & Conlumino [email protected] | 020 7291 8720
Looking ahead ... Easter March 2014
Summary
The economy GDP growth, falling unemployment and a buoyant housing market point to a burgeoning recovery in the British economy. Although the newfound optimism is to be welcomed, it should be viewed with a note of caution. On the surface the rapidly falling levels of unemployment are a success story, but stagnant wage growth and low productivity levels mean that inflation remains high, while there is a danger that the recovery is unbalanced and over-reliant on consumer spending. There are also fears that the government’s Help to Buy scheme is leading to unsustainable growth in property prices. Stronger growth in the export market will dampen speculation that the recovery rests on weak foundations.
Retail trends Squeezed household budgets have created a tough environment for retailers. Widespread inflation in essentials like food and household bills mean that disposable incomes remain low. The by-product of this is a discounting culture with shops competing to offer the best value in the hope of boosting sluggish volumes. Competition in retail is rife and this, along with advances in technology is fuelling a growth in innovation as retailers strive to keep up with changing shopping habits. Whether it be multichannel advances, ever more convenient fulfilment options or instore technology, retailers across the spectrum are having to re-evaluate their offers to retain relevance and stay one step ahead of the competition.
Sentiment While views on the economy have become increasingly positive in recent months, the same cannot be said of consumers’ views on their own personal finances. Unemployment may be down, but wages are not increasing and inflation in the cost of living remains persistently high. Perhaps, even more worringly, there is a wide regional variation in consumer sentiment with much of the optimism about the economy and personal finances being driven by the more affluent South. To some extent this bears out fears that the recovery is overly focussed on London to the detriment of other parts of the UK.
Consumer data Our consumer survey indicates rising levels of apathy towards Easter, with many viewing the occasion as over-commercialised. In spite of this, the popularity of typical Easter products endures, with hot cross buns and Easter eggs the top products consumers intend to purchase. In the Easter egg market, brands still have the edge, with own-brand eggs facing a challenge to catch up. Reflecting the general lack of enthusiasm for Easter, planned activities are decidedly low-key. It may not be party season, but the Easter Sunday meal is still likely to take centre stage, with chicken and lamb heading up many consumers’ shopping lists.
2014 has arrived with plenty of scope for optimism in the retail sector. On the economic front, housing transactions are up, unemployment is down and a general feeling of optimism is pervading the economy and consumer sentiment that has not been seen since the recession began to bite. With the Easter bank holiday sales period on the horizon, greater momentum in the housing market will be particularly welcome news for home and furniture retailers for whom such periods are critical. Positive movement in the January sales certainly bodes well for more good news over Easter.
Looking ahead to Easter 2014
Tough times are still ahead for retailers though. Soaring household bills and sluggish wage growth mean household budgets continue to be squeezed. Retailers are having to work harder to encourage spend resulting in widespread shop price deflation, with discounting and promotions rife. Trading in the early stages of last year was hit by unseasonably cold weather, but with the crucial Easter weekend falling a few weeks later this year, in April, and no sign of a cold snap as yet, gardening and outdoor living retailers in particular will be crossing their fingers for a sunny spring ahead.