In spite of the gloomiest of predictions, several major players in the retail world did better than expected according to the Christmas retail results posted over the last couple of days.
Sadly some businesses failed to capitalise on the last minute rush, and will no doubt pay the price in the months to come as the recession bites even further. Others, however, fared far better than expected, with John Lewis posting a huge increase in online sales during the Christmas period amounting to almost 28%. Even under fire multichannel fashion retailer, Next, announced a surprising increase in turnover, with total sales up by 3.15% from August to December, and an increase of 16.9% in online sales thanks to Next Directory which compensated for the sub-par store performance.
So, what makes some retailers more successful than others?
Why have the likes of John Lewis broken all records both in store and online, whilst Next and other fashion retailers have only managed a minimal increase? The answer, it would appear is twofold. First online retail and ecommerce is driving the market as more and more customers resist the ‘allure’ of the shops and choose to shop from the comfort of their living rooms. Secondly, if you can manage to hook the public in with a well-timed and carefully constructed advertisement, then it seems you’re onto a winner. Maybe John Lewis was taken unawares, but its Christmas advert with the re-worked Smith’s song ‘Please, please, please, let me get what I want’ took the nation by storm and went viral, being viewed by over 3.9 million times on YouTube. If ever you wanted evidence of clever, targeted marketing, there you have it.
Online sales at John Lewis rose by 27.9% in the five weeks leading up to Christmas.
In the latest trading statement, the company stated that online sales had already topped £600 million in the financial year to date which runs until the end of January. However, it wasn’t just online sales that soared. Sales across all channels rose by a healthy 9.3% for December to £596 million. However it was the online sales, driven by the advertisement that really drove the business on. According to Andy Street, managing director of John Lewis, the success of its online operation has been staggering: customers’ use of Click and Collect operations to buy online from John Lewis and to collect from 129 John Lewis and Waitrose stores rose by 90% in the period. Whoever said online marketing would never take off? Street added: “the strength of our online operation was very much in evidence during this key five week period, confirming our strength as a pre-eminent multichannel retailer.”
John Lewis unsurprisingly is looking forward to another year of growth and will be targeting the holiday periods with zest. Next, by contrast, is somewhat gloomier about the future and, at best, is believed to be only expecting very modest growth during the next financial year with sales up by a minimal amount. Perhaps what they need is a clever viral ad campaign and a catchy tune. After all it worked for John Lewis, didn’t it?