Summer is only the unfulfilled promise of spring? Retail sales for July

July 8, 2019

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Martin Newman

By Martin Newman

The Consumer Champion

Every month, BDO, an accountancy firm, publishes the High Street Sales Tracker, which gives near-real time reports of the health of the high street. Their June figures just been announced, and they’re not full of the joys of spring. It’s not exactly dropping off a cliff, but this latest downturn of 0.8% means the high street has now seen 16 out of 17 consecutive months of no in-store sales growth.

So what’s happening? It would take more than just one blog to dissect the whole 17 months, but June has been described as a “washout” for retail sales for a number of reasons. One, of course, is Brexit. June marked the third anniversary of the referendum, and even the Government’s most ardent cheerleader would struggle to argue that the way forward is clear. Business hates uncertainty, that’s obvious, and the inability to plan ahead is still causing nervousness. This brings us on to a structural problem. People like me are forever giving advice – good advice, I might add! – to high street firms about how they can adapt, learn and survive in the modern marketplace. Retailers aren’t stupid, and they aren’t deaf. They see columns like mine, and they understand what I’m saying.

That’s all well and good. But there’s a vicious cycle at work here. In order to strengthen growth and boost sales, retailers need to invest and adapt in their stores and platforms. But without healthy revenue and some certainty about the future, they can’t have the confidence to make that kind of investment. So you get stuck in this downward spiral. One analyst described the lack of forward planning as having “a crippling effect”, and it’s hard not to agree.

So what can retailers do in the short term to lift the gloom and have a sunnier July and August? There are a few things. One, and it sounds a bit feeble but it’s so, so important, is hope for better weather. We seem to be enjoying a warm spell now that July is here, and it’s a simple yet multi-layered truth that better weather boosts retail growth. A week into July, we’ve had a lot of sunshine, fairly widely spread across the country, which will be a salve to the high street.

But retailers can’t just sit back and hope – they need to be proactive. One quick win would be to work harder to integrate online sales with those in bricks-and-mortar stores. There’s a lot of complexity in that statement, and it can (and must) be a long-term project, but in the short-term retailers have to tie the two together in the most seamless way they can. Can’t find what you’re looking for in store? The sales personnel should be on hand to help you find it online. Ordered something on the internet but you’re unavailable at the time when it’s due for delivery? You should be able to pick it up at the store at your convenience. Little things, too: say you see something online and like the look of it but want to handle the real thing before you commit. You should be able to place an order but put a temporary hold on it, go into the store, see the item then get them to lift the hold and authorise the purchase. It’s called reserve and collect. Keep it simple, keep it convenient, keep it customer-friendly.

When the sun shines, retailers need to make sure to merchandise their products more effectively. T-shirts beside shorts. Swimming costumes beside sandals and flip flops. Grills and barbecues beside garden chairs. There are obvious opportunities to increase average order values by cross selling more effectively.

Discounts are an important tool too. Obviously, cutting prices provides an instant stimulant to sales, but it’s a delicate balance. Cut prices too much, and your cash registers may bleep a happy electronic tune, but you won’t be making the profits you expect and deserve. There’s also the danger of training your customers to only buy when you’re on sale.

However, stay aloof from price wars, and people simply won’t come into your shop or visit your website. We can all think of retailers with whom we really don’t associate low prices: the sort of place you might go if you’re feeling flush or have convinced yourself something is ‘an investment’. Fine, that’s one reputation to have, and some can thrive on it – but it’s got to be selective. For most retailers, discounting is a game you simply have to play. Just ensure it doesn’t become a permanent play, otherwise it becomes a race to the bottom.

Retailers need to become service providers. Selling stuff isn’t enough. John Lewis has made this transition very effectively. You don’t just buy wallpaper, they can provide the people to hang it for you and decorate the rest of your house in the process.

There are bound to be other tricks too. We’ll know in a matter of weeks whether summer is fulfilling its promise, and whether July and August prove to be more profitable than June. Even if they don’t,  retailers should think about the sort of things I’ve been saying. Even in Britain, summer comes around every year!

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