ONS retail dip – how can retailers turn it around in time for Christmas?

It’s no real surprise to see retail sales fell for the fifth month running in September, by 0.2% according to ONS figures – but it’s encouraging that this is a continued reduced drop from July’s 2.8%, and the 0.6% drop in August. Non-food stores were hit by a 1.4% fall in sales, with many consumers still choosing to shop online. Meanwhile, food and fuel sales saw a boost. It can’t be ignored that the difficulties with fuel supply last month played a part, as ‘panic buying’ drove consumers to stock up.

To bring consumers back to non-essential shopping, retailers need to invest in creating personalised, valuable experiences. This goes further than just offering the products customers need. It’s about providing unique experiences, whether that be rapid same-day delivery or experiential destination stores. To achieve this, retailers need to invest in understanding their customers, by collecting and analysing consumer data through effective digital marketing engagement and loyalty programmes. We are seeing some retailers focus heavily on enhanced physical convenience, such as Tesco’s and Amazon’s new ‘just walk out’ stores. Otherretailers would do well to follow suit, bringing the speed and ease of ecommerce into the physical shopping experience, making it even easier for consumers to keep coming back to physical stores.

Faced with shortages, supply chain delays, and unpredictable weather, forecasting algorithms also need revision. Traditional forecasting techniques, based on historical data and trends may no longer work effectively. Retailers need to show agility in the buying process, especially as we enter the Christmas trading period. Retailers should take the opportunity to prepare for this period, ensuring they have the right stock at the ready. This preparedness will be difficult to achieve but can be helped along by analysis of consumer shopping patterns and behaviours, and even predictive AI and ML tools to forecast short-term demand.