By Omri Orgad, below, CCO, Bright Data
This year’s Christmas is like no other. Amid the highest inflation since the early 1980s and spiralling energy bills, the UK public is increasingly worried about the current cost-of-living crisis: with 86% of people concerned about day-to-day living costs and just over half (54%) saying they are very concerned, according to a previous PwC study.
This is having a ‘domino effect’ on people’s typical spending behaviours, especially ahead of this year’s festive season. A recent study conducted through our partnership with Vanson Bourne also showed that 42% of UK consumers are mindful of prices this year, making it the number one factor affecting online purchasing decisions, with shoppers also looking for an average discount of over 30%. In fact, 68% of them plan to spend less than they did last year, with 70% citing ongoing inflationary pressures and a looming global recession as the primary reason for this.
This puts retailers in a precarious position, piling more pressure on consolidating budgets for marketing, advertising, and other strategies, earlier than usual. Luckily, it’s not all doom and gloom. Customers are still expected to spend an average of £1000+ this holiday season, but it means that they’ll be extra diligent about how and with whom they’re spending money.
So how can retailers adapt their practices to meet demand and better understand consumer attitudes towards spending this season?
Tap into the power of data now
The cost-of-living crisis is top of mind for every consumer and, as such, most are planning budgets in advance. This is a great opportunity for retailers to act now and get ahead of the game by looking deeper into the market and analyse competitor discount offerings. By analysing the public web data on offer, they can compete with and offer significantly better discounts to keep sales flowing during this year’s festive shopping season.
Our own research has already found that 80% of consumers began their holiday shopping before Black Friday! That’s over a month before Christmas, which really brings into perspective how early retailers need to plan to maximise festive shopping sales. The consequence of delaying action means most retailers will end up with a limited pool of customers to sell to and an abundance of stock to sell in the new year – not ideal!
Invest in reliable data partners
Let’s be honest, it may be a cliché but a true one. To make money, you must invest money. This is why it’s important to carefully choose partners that will allow you to better understand the market and your customers. Working with companies that allow you to collect and analyse public data sets means that you can get ahead of the wave when it comes to customer expectations or worries.
For example, most UK consumers are planning to invest early in their Christmas gifts, not only because of economic reasons but also due to potential delays in delivery as a result of ongoing supply chain issues. Research also found that shoppers continue to be concerned about supply chain disruption, with 43% worried about not receiving their purchases on time. The reasons for these disruptions include labour shortages, Brexit trade barriers, global supply problems and panic buying.
With Royal Mail planning to strike in the coming days before Christmas, and other supply chain players following suit, consumers are in fear of not receiving their items. Retailers armed with this information can offer next-day delivery promotions to settle any worries and knock their competition out of the park.
Use data sets to get ahead of market discounts & offers
Retailers are more conscious of prices, too, considering the ongoing economic situation. Therefore, data doesn’t have to be a one-time deal. In fact, data sets could prove to be a great alternative solution.
These are large collections of information that focus on a single subject collected from either single or various other sources. These sets are then structured into readable tables or formats from which valuable insights can be easily drawn. These can be more beneficial than web scraping when seeking the following four elements, like coverage, quality, enrichment, and operational efficiency. For example, retailers are able to deploy pricing models that can react to the ebb and flow of the market, discover new inventory or opportunities, monitor MAP pricing efforts, and better position their products, whether monetarily or through new messaging, to attract a larger audience and maximise profit margins.
By tapping into public data sets frequently, retailers can adapt to product price, promotions, discounts, and other relevant e-commerce data fluctuations. This saves them time otherwise spent on manually searching for this data, as well as money.
The bottom line
Despite economic uncertainty, there are still opportunities out there for retailers this holiday shopping season. To spot them, they will need to be smart about how they use data, in particular public web data, to offer better deals and experiences to customers. They must also be careful to monitor when competitors are discounting products and by how much, as being just a few percent off or a few hours late could be the difference between success and failure.
How retailers collect, analyse, and use data will be crucial to their survival in 2023 and beyond, as consumers continue to tighten their belts.