A survey of 8,500 consumers and 1,000 retail merchants in the UK, Germany, France and Spain has revealed sales concerns ahead of Black Friday – and also painted a picture of what businesses are doing to capture demand again.
Checkout.com carried out the research and found that several challenges are causing disruption to operations this Black Friday (the highly promoted day on 26 November this year that offers discounted prices on products.)
Business owners fear the volatile market will have an impact on its key shopping date, as many consumers have yet to return to the shops – and many can't afford an expensive Christmas as a result of the pandemic.
Shipping costs was another core concern, with 40% of those surveyed saying that it is significantly eroding their margins. Supply chain issues was another problem frequently cited. In particular, 30% of retailers were worried about having adequate stock levels to capture the possible surge in demand for online shopping.
Then there's inflation. A quarter of retailers said wholesale price hikes will inhibit their ability to offer discounts and Black Friday deals this year.
Despite this, 68% of those asked were hopeful that consumers who can, will plan to spend more than they did in 2020.
“Following what was primarily seen as a ‘cancelled Christmas' in 2020, there's expectation friends and families won't allow another year of festivities to slip through their fingers,” the survey said.
Retailers said they are also breaking from tradition in search of revenue in the face of the circumstances.
“Over half of those we surveyed have invested in early marketing and sales campaigns to engage shoppers sooner. This play has yielded results, with 67% of retailers telling us they've experienced an early uptick in seasonal sales,” Checkout.com said.
“This makes sense given 50% of consumers say they've started their seasonal shopping early. A trend encouraged by their own fears about stock shortages and shipping delays meaning that gifts won't arrive on time. There's also a desire to spread spending across a longer period as inflation impacts how much disposable income they have,” it added.
The data also revealed how habits are changing.
It found that worries about stock shortages, shipping delays and cost were discouraging consumers from spending with retailers from overseas.
“Only a third of shoppers say they'll purchase seasonal gifts from retailers in the same country as the recipient,” the survey said.
However, the research highlighted a more positive development with 66% of consumers surveyed saying they don't expect to return a single item purchased – good news for the retailers.
“Every sale counts across Black Friday, Cyber Monday and the rest of the peak shopping season. Ensuring consumers can pay without complication is therefore critical,” Checkout.com said.
Therefore, to avoid losing customers to a poor checkout experience, 58% of retailers said they have invested in improving their digital payments and online checkout systems.
This includes enabling more payment methods such as digital wallets, Google Pay and Apple Pay – which merchants anticipate 75% of consumers will use, the survey also noted.
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