When I was a youngster the Boxing Day sales were a big thing. You would get up early and venture into Glasgow with your Christmas money hoping to snap up a bargain on the Christmas gift that you asked for but didn’t get. Everyone knew that there were great bargains to be had for those who got there first on the 26th of December. Fast forward ten years and this mini British tradition has all but disappeared from our high street.
As I write this on the 20th of December three of my favourite stores have already started their 50% off sales and are even offering guaranteed delivery before Christmas.
I no longer need to wait till after Christmas to grab a Christmas bargain...
When you consider this is the peak trading season for retailers in many verticals what is the reason for this change in behaviour and what does it mean for the industry? Why are retailers being forced to start their sales during peak trading instead of waiting till just after Christmas and creating those long lines we used to see outside stores like Next on Boxing Day?
What has changed? ……..Lots
Our nation now has a discounting addiction and the cure is hard to stomach for many retailers. Over the past 10 years the level of in-season discounting has risen at a frightening pace. As consumers we have come to expect discounts and rarely pay full price when we know we can either wait or shop around online till we find a discount. Some companies have been able to shake this national trend by focusing on unique products and a strong brand message, Jigsaw being a great example, but this isn’t an easy path to take and starts with a reduction in revenue (short term pain for longer term gain).
How we shop has changed dramatically! With smartphones and tablets eliminating the ‘trip into town’ people can now shop whenever the conversation on Christmas Day becomes as dry as the turkey. Last year we saw bigger spikes in usage for Mallzee on Christmas Day than we did on Boxing Day. This shift in behaviours means retailers are now starting their sales sooner so as to take advantage of consumer browsing and demand.
The number of companies competing for consumer spending in the last 10 years has jumped dramatically. Whether it’s new online companies or international brands focusing on the UK there is now a lot more competition for consumers attention. In such a competitive environment for many it’s much easier to reduce prices than create a unique product that ensures people are willing to pay full price.
Companies haven’t evolved their buying and merchandising practises and are still following the 80/20 rule of success and failure. This means that come the end of the season they have vast amounts of unsold stock that they cannot carry forward into the new season. By not optimising their initial stock ordering process they create a headache for themselves and create the need for a huge amount of discounting and wastage. This is a space that few retailers are focused on, as even those viewed as innovative tend to focus on how to sell more products - when surely the bigger question is how do we sell more products profitably? (Answer; by using Mallzee Product Future Wink Wink)
The credit crunch is still biting for many retailers meaning they need to turn stock quicker in the season. This is due to many companies no longer having the credit terms they used to. This means they need to invest more into stock and often sooner in the season. The quickest way to bring revenue into the business is to liquidate the stock through sale and reinvest - no matter how damaging to brand and the overall business this is.
Weather - whilst we have now had a proper cold snap it didn’t happen until late November/early December meaning that shoppers weren’t investing in outerwear, thus retailers now have a lot more stock than anticipated in these, often pricier lines.
Combining all of these reasons has led to the demise of the traditional Boxing Day Sale. Instead for some retailers the month of December has become one big continual sale that is a continuation of Black Friday/Cyber Monday weekend
This Christmas tradition is in its final stages and it won’t be long before we’ve forgotten all about it…