Aussie retailers look forward to Christmas

| September 26, 2018

Australian retail management platform, Neto, has released findings from its ‘2018 Holiday and Christmas Retail Snap Poll’.  It reveals that most Australian retailers are backing online channels, including branded eCommerce sites, marketplaces and online sales events, as a pivotal channel and growth driver for Christmas trading this year.

The snap poll, conducted week 17–21 September 2018, surveyed 107 Australian small-medium sized retailers about their sales predictions across channels, as well as intended marketing and promotional activity leading up to the Christmas trading period of 2018.

Retailer respondents included a mix of 30% omnichannel retailers (physical stores, eCommerce website and selling on marketplaces such as eBay, Amazon, Catch, etc), 27% pure online with a multi-channel approach (eCommerce site and marketplaces), 32% a bricks and mortar store and selling via one online channel (physical store and either eCommerce site or marketplaces) and 11% pure eCommerce selling only through their owned, branded site.

“Today marks three calendar months to Christmas Day and, for many retailers, this period presents the largest sales opportunity of the year,” said Ryan Murtagh, CEO and founder of Neto.

“It’s noteworthy that every retailer we spoke to has online – either marketplaces, an eCommerce store, or both – as a pivotal channel for its Christmas sales strategy. Regardless of their size, we’re seeing most Australian retailers adapt to the evolving shopping preferences of consumers.”

Key findings the 2018 Holiday and Christmas Retail Snap Poll include:

1. Marketplaces are growing in importance to Australian retailers

· Selling on marketplaces (such as eBay, Amazon, Catch, etc) is a widely adopted strategy with 60% of respondents using marketplaces as a complementary sales channel to their physical stores or eCommerce sites

· 50% of retailers using marketplaces as part of their channel mix, expect up to 25% of Christmas sales will come through marketplaces

· One in three, or 29%, expect 2018 marketplace sales to grow and outperform the last Christmas period, 35% expect marketplace sales to remain consistent with 2017, and only 8% predict marketplace sales will decrease compared with Christmas 2017

2. eCommerce is ‘king’ this Christmas but Amazon is yet to gain traction

· Of the 85% of retailers with a branded ecommerce site as part of their channel mix, one in four, or 27% of retailers, expect more than 75% of Christmas sales to be sold via their online store. 20% predict between 50-75% of sales activity, and 38% predict less than 25%.

· 43% expect their branded ecommerce site to trade higher volumes and contribute to a higher mix of their Christmas sales in 2018, compared to 2017. 32% expect a similar performance to 2017, and only 5% expect the channel to perform worse.

· When asked to predict best performing channels this Christmas, branded ecommerce sites was ranked no.1. Coming in second was physical stores, followed by eBay, and then other marketplaces such as Catch, Groupon or TradeMe. Amazon Australia has yet to gain the interest of merchants with 45% of respondents stating it would drive the lowest volume of sales this Christmas.

3. Boxing Day and January sales will be eclipsed by Pre-Xmas sales promotions

· 58% of retailers said they intend to offer major promotions or sales BEFORE December 25, 2018

· This is higher than the percentage of retailers, 54%, who intend to offer sales POST Christmas aligned to traditional Boxing Day and January sales

· 39% of retailers will participate in online shopping events leading up to Christmas. Black Friday is the most popular event among merchants with 34% indicating they will participate, followed closely by sister event Cyber Monday with 31% retailers indicating they will participate

· 61% will not participate in online shopping events, interestingly, 16% stating they were unaware of these events

4. Social and digital will reign supreme as pre-Christmas marketing tools

· Social media is by far the most popular marketing tool with 85% of retailers indicating they will use it leading up to Christmas. Social is followed by banner advertising at 64% and email marketing at 48%.

· Of those using social, 99% will use Facebook, compared to 74% on Instagram and 18% on Twitter.

· Nearly one in three retailers (28%) intend to engage in cross-promotional campaigns with companies such as eBay and AfterPay.

5. Retailers risk are averse and sticking with what they know but marketplaces are the exception.

· When asked about trialing new channels this Christmas, 72% of retailers indicated they would not be utilising any new sales channels this year

· The highest ranking exception is ‘marketplaces’ with 14% indicating they would trial online marketplaces this Christmas. Others include 8% trialing physical markets, 5% new stockists, and 4% pop-up stores.

“It’s interesting that nearly 60 percent of retailers intend to offer sales before Christmas rather than in the traditional post-Christmas sale periods. One could speculate this is a result of growth in eCommerce and online marketplaces where price has a stronger weighting around sales conversion.

“It’s also testament to shoppers expecting a consistent sales experience regardless of which channel they buy from. For retailers, this means being able to sell everywhere and manage everything seamlessly, particularly in busy sales periods such as Christmas,” said Murtagh.