The shape of things to come

So now we know how Christmas 2009 could finish up for the retail industry. America’s big Thanksgiving holiday which is followed by “Black Friday” and now “Cyber Monday” has taken on the role of being a global benchmark for retailers. And the official verdict, as supplied by the National Retail Federation’s analysis of members’ sales, is that the numbers of shoppers was up - good news - but the average transaction was down. Not so good news.

Online though was a very different picture. Despite the numbers of online shoppers easing back a little earlier in the year as even they took fright from the recession, they appeared to have returned in droves on Cyber Monday. US online marketing analysts, Coremetrics, reported that across the 500 online firms they surveyed, online sales rose 16%. A truly staggering number.

Here in the UK, the latest retail sales barometer showed the fastest growth for over three years and that national bellwether, stores group, John Lewis, reported that sales grew by 22% year on year last week.

What is interesting talking to US retailers and observing what is going on in the UK, is that no-one is particularly surprised by the Thanksgiving experience that more people are out shopping but that the are looking to spend less. The hope and fear of course is that retailers have judged the mood right with their inventory levels (not too much and not too little) and with their price promotions. Across the UK, many department stores have been following the lead of Debenhams with “25% off” promotions days, but so far it appears planned and controlled. And seems to have worked in pulling in the customers.

But what John Lewis’s current sales curve also demonstrates is that shoppers are being drawn to those brands and stores that people trust. Online traffic is up because this gives people the sense of control over their shopping - they can look for the best price and they can buy with who they want. Out in the shops and stores, shoppers’ decisions on where to go and where to buy are bound to be influenced by those brands they trust the most - for the good old fashioned retail rules of quality, range, choice, value and price.