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Tuesday, December 10, 2019
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    Home Comment Advice

    A festive general election: how will retailers survive Christmas 2019?

    The key strategies retailers can use to maintain company growth and profits as the UK heads towards a festive general election and more Brexit uncertainty

    Alessandro Carrara by Alessandro Carrara
    November 13, 2019
    in Advice
    Will retailers rise to the occasion this Christmas?
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    For retailers, the closer it gets to Christmas, the more political uncertainty there is leading to dwindling consumer confidence and irrefutable anticipation of poor festive sales. After a year of struggle for retailers across the country and more odds against them, how can this festive season be the most profitable it can be?

    September was the poorest month for the UK high street since 2011 with UK retail sales falling 1.3% compared to September 2018, British Retail Consortium data suggests. Along with struggling sales all year round, this has undeniably shaken the confidence of retailers along with the collapse of huge high-street names, including Forever 21, Bath Store and Thomas Cook.

    This undoubtedly leaves retailers grasping for strategies to maintain company growth and profits as the UK heads towards a festive general election and more Brexit uncertainty.

    The overall financial uncertainty surrounding the general election and Brexit means all retailers, both small and large, have found themselves entering the ‘golden’ trading quarter with low confidence, grappling for hope as consumers continue to reduce domestic spending. For many retailers who depend on this peak trading quarter, this could lead to the collapse of sales and could even follow the paths of many businesses’ hardship leading into the new year.

    Although retailers face fears as political uncertainty further exacerbates change in consumer trends, could their adaptive business strategy lead to their longevity? It is critical now more than ever for businesses to make the most of all potential revenue streams and new business strategies to adapt to changing consumer needs and behaviour. Doing so will support revenue growth and develop a resiliency towards the unpredictable retail environment of the future.

    Retailers are also bracing themselves for the season of returns amidst this political chaos. Every year, consumers buy and subsequently return high volumes of products online and in store over December and January.

    The reluctance in shoppers to retain purchased products can be related to financial uncertainty and supported by data that shows online sales growth being well below average at 12.4%.

    This year, more financial uncertainty is likely to cause even more buyers remorse as consumers face Brexit in the new year. In an effort to adapt to this consumer behaviour and subsequent high returns rates, large-scale Ecommerce retailers like ASOS have found themselves with little option but to drastically reduce the price of goods as they move through the seasons.

    While consumers are feeling uncertain about their financial future and experience buyer’s remorse, retailers are experiencing more returned products along with anticipated new year Brexit supply chain disruption. Spaces with less friction in the supply chain will become the most rewarding areas to incorporate into retailer’s business strategies. Utilizing these avenues of profitability will be integral to compensate for the lack of sales traction elsewhere.

    As retailers look to recover profits from unsold and returned goods, secondary marketplaces have the potential to offer retailers recovery revenue streams. For example, UK online secondary marketplaces will be uniquely positioned if the UK sits outside of the European Economic Arena following Brexit.

    These marketplaces could become a gateway for products between the EU and the rest of the world. Secondary products which would otherwise have no value could become increasingly valuable on secondary marketplaces as products can move through the supply chain with ease and profitability. Therefore, these channels could be an option for retailers to recover lost profits from low sales and high volumes of returned products.

    With Christmas being the peak season for volumes of returned gifts and products, this could be a prime time for retailers to recover profits from otherwise idle returned overstock in the new year.

    The global secondary market is a vast hidden market which is estimated to be worth around $800bn in this year alone, yet it is overlooked by many companies and individuals regarding returns.

    This potentially leaves secondary auction markets, like B-Stock that connects B2B buyers and sellers together, in a strong position facing Brexit by offering uncertain retailers a viable option to build revenue resiliency throughout a slower sales period.


    By Ben Whitaker, B-Stock’s EMEA director

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