Christmas 2018 was a tough one for many retailers. It has been reported that the Christmas trading period was of one of the worst for sales growth, over the last ten years. If many retailers struggled to entice customers in with festive deals, how will they fare this Valentine’s day? Is it all rosey for the British high street, and what can be done to offer the best Valentine’s Day offers this year and beyond?
Businesses would do well not to fall completely head over heels if they want to avoid an awkward break up for the remainder of 2019.
It’s time to question age-old clichés
Valentine’s Day is strongly associated with red roses, posh chocolates, champagne, fancy restaurant dinners and frantic last-minute purchases from (mostly) male shoppers on their way home from work. While these images are typical for February 14th, and probably will be for years to come, consumer spending habits are evolving– unlike ever before they are becoming more questioning and critical of where their money is going and expecting deals that are truly personal and authentic to them.
Roses are red… but think carefully on your stock: As the first image that comes to mind on Valentine’s Day, retailers are likely to stock up on roses to make sure they have plenty to sell during peak times. However, while the red rose is an enduring Valentine’s gift, as a perishable low-cost item, retailers should forecast sensibly to ensure there aren’t too many left on the shelf. This is where drawing on historical sales data is absolutely critical. Retailers should be asking themselves: How many roses did I sell last year? How many did I sell at full price? How many did I have to dispose of or markdown to clear? What profit did I make from this item? When it comes to roses, or any other time-sensitive perishable items, sales strategies and quantities should be based on the answers to these questions.
Catering for the cost-conscious consumer: It is important to remember that Valentine’s Day will not appeal to everyone, and there will always be those who are cynical of the holiday – who tend to turn away from heavily branded stereotypical gifting. Millennials in particular may be a little more questioning of old romantic gestures. Consumers are also generally watching the pennies a bit more closely – meaning retailers will really have to demonstrate the value and distinctiveness of their products, offering tailored and bespoke deals to different audience demographics in more innovative ways than ever before. The supermarket sector, for example, is making serious progress in challenging restaurants with ‘top meals for two’ at a fraction of the price.
Geo-analytics, actually: Unsurprisingly, there will always be those shoppers who leave their Valentine’s Day purchases to the Nth hour. The images of men and woman stopping off at a petrol station on their way home to purchase flowers is a cultural reference for a reason. However, retailers should not place orders by relying on this last-minute spike in sales. This is where Geo-Analytics comes to the fore. Where a retailer’s store is based could seriously alter its sales strategy. For example, being strategically placed on the commuter belt, or near a train station, increases opportunities to capitalise on last-minute purchases, or click and collect service. However, being in an out-of-town shopping mall will make passing trade for these sudden spikes in sales less frequent and therefore shouldn’t be banked upon.
Breaking the mold
While these specific examples are tied into Valentine’s Day, the lessons they carry ring true for all retailers throughout 2019. Keeping close to the mood of the market is key. There is more social pressure than ever for retailers to do something different, and bit ‘out of the box’ to get customers talking. There is also arguably more pressure than ever on consumers to do something different this Valentine’s day, in a society often shaped by what is posted to friends and family on social media platforms such as Facebook and Instagram. Many want a story or experience behind their product or service – an authentic experience is absolutely key.
A combination of insights from previous sales, predictive and geo-analytics will also help shape a solid retail strategy, and a love affair with customers that will ensure ongoing loyalty and repeat customers.
Paul Winsor, Senior Director of Industry Solutions Retail & Services at Qlik
Rachel Lund, Head of Insight and Analytics at the British Retail Consortium