What retailers need to know about Christmas

There’s little doubt that Christmas will look different this year. 

 

No-one will be travelling overseas. Border restrictions may still be in place. Social gatherings – from work Christmas parties to family events – will be smaller. Even Santa is unlikely to be posing for photos thanks to the risk of COVID-19.

 

For retailers, the global pandemic has added an extra layer of complexity, and shops and services will need to adapt to new social-distancing restrictions, a shift to online sales and delays in shipping. 

 

Yet the next few months remain critical. Exclusive Afterpay data shows that November and December alone account for around a quarter of its retailers’ annual revenue.

 

“Retailers will be hoping that Christmas offsets the challenges of earlier in the year,” says Rae Smethurst, Director of Sales at Afterpay.

 

E-commerce strategist Nathan Bush, of 12 High, says there is uncertainty around how this year’s sales season will play out. “On the one hand, we still haven’t seen the full economic impact of COVID yet,” he says pointing to the downturn in the economy and winding down of JobKeeper and JobSeeker. “But on the other hand, people haven’t been on overseas holidays, so will they spend the money on gifts for each other?” 

 

A shift in sales season

 

The truth is that – even before the pandemic – the Christmas sale period was undergoing a transformation, thanks largely to the rise of sales events such as Click Frenzy, Black Friday and Cyber Monday. “Pre-Christmas is now the predominant ‘sale’ period, whereas even 10 years ago the predominant sales period was Boxing Day [and beyond],” says Bush.

 

Afterpay data shows that Click Frenzy – which will start on November 10 this year – usually marks the start of increased Christmas spending. In 2019, sales during Click Frenzy spiked by 27 per cent compared to the previous four-week average. 

 

But it was Black Friday and Cyber Monday that saw the most significant surge in sales, with revenue among Afterpay retailers spiking by 61 per cent compared to the previous four weeks.

 

Pre-Christmas is now the predominant ‘sale’ period, whereas even 10 years ago the predominant sales period was Boxing Day [and beyond].

- Nathan Bush, e-commerce strategist

Last year, fashion retailers saw an early uptick in late October – perhaps coinciding with end-of-year events – whereas home and footwear grew most significantly around Click Frenzy, while outdoor revenue continued to grow after Christmas.

 

For Afterpay’s bricks-and-mortar and omnichannel retailers, the final week of the year – from Boxing Day onwards – remains important, with in-store purchases as a share of total sales peaking in week 51. 

 

But Bush points out that Boxing Day will likely be impacted by COVID-19, with retailers mindful of avoiding large crowds. He adds that US retailers’ approach to Black Friday should offer some clues as to how the Boxing Day sales will unfold here. Already, he says, some major retailers like Walmart have indicated they won’t be holding Black Friday sales.

 

Ciara McGoohan, Afterpay’s Director of Merchant Insights and Data says that while sales and discounts will vary across the eight-week period leading up to Christmas, it’s likely that discounting will be widespread. “It will be a competitive market to gain share of wallet.”

 

In such a competitive period, we’ve created a special in-depth report aimed at helping retailers succeed this Christmas. Head to the links below to find out.

 

How to discount smarter this holiday season

Meet the Sydney retailer who really knows Christmas

5 tips for managing staffing during the Christmas rush

How to prep your e-commerce site for success

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