When managed correctly, peak returns could be an opportunity for retailers
As online retailers set their sights on a pandemic-era peak season like no other, ecommerce orders are predicted to surpass the records already been broken throughout the year. However, the rise in order volumes will almost certainly be followed by a rise in returns.
The trouble with returns is, while they mean a great deal to consumers, they can also cost a great deal to retailers. They’re not commonly called the billion-dollar problem for nothing – according to KPMG, returning an item can cost up to twice as much as it does to deliver it.
Unless retailers have a plan in place to effectively manage the incoming influx of returns, they could quickly find their stellar peak sales eroded by shrunken profits and tied-up inventory. Retailers need a returns model that’s attractive for consumers, but also efficient, cost-effective and intelligent.
Offer a returns policy to convert
Before you conclude that offering returns is more trouble than it’s worth, consider the cost of not offering them. As more and more consumers expect free returns as a bare minimum, many will look elsewhere if you can’t give them what they want. According to Metapack’s own research, 69% of consumers consult a retailer’s returns policy before making a purchase.
Make sure your customers like what they see, or else they won’t hesitate to take their business elsewhere. This means treating returns as you would delivery and providing them with a range of convenient options to send the item back, if needed. It also means stating your returns policy prominently on your homepage and product pages.
Take the strain off your reverse supply chain
Offering returns might be necessary in today’s ecommerce environment, but let’s face it – they’re difficult to manage. Unlike forward logistics, reverse logistics are unpredictable. The good news is, there’s a great deal you can do to build efficiency into your reverse supply chain.
Trying to manage returns manually in-house is often a costly mistake. Many of the retailers we work with turn to our returns management software to help them automate and bundle tasks – saving a great deal of time and money in the process. Software also has the advantage of providing a wealth of data transparency that can help retailers predict returns, and even plan for items to be sent on to the locations where they’re most likely to be sold.
From returns, to return customers
When retailers manage to provide a smooth and convenient experience, suddenly returns are no longer a cost burden, but a customer retention opportunity. According to Accenture, customers who enjoy flexible and transparent returns go on to increase their spend by an average of 29%.
For many customers, the worst part of the returns process is the anxious wait between sending off a parcel and receiving their refund. Providing accurate timeframes, clear communication and returns tracking can quickly restore peace-of-mind and increase a retailer’s likelihood of retaining the customer. If a retailer uses a dynamic solution like a returns portal to offer this service they might even be able to use personalized advertising capabilities to drive additional conversions.
When managed well, returns can be achieved with minimal cost, and minimal disruption to inventory. And that’s exactly what our own returns management software reduces helps our customers to do. It’s also one of the reasons why Metapack was recently awarded Best B2B eCommerce brand at the eCommerce Awards.
When done well, returns can actually be an opportunity for retailers – an opportunity to convert, and an opportunity to build loyalty with valuable customers. And in a peak season where the scale is set to be bigger than ever, the opportunities have never been so great.
Clarks begins talks with landlords ahead of CVA proposal
Clarks has reportedly started talks with its landlords over possibly switching to turnover rent models, as part of the footwear retailer’s wider CVA proposal. According to Sky News, Clarks and its advisers are meeting landlords this week to negotiate a restructuring deal that would see the chain switch to a turnover-based rent model for future rent payments. The proposed deal be part of Clarks’ proposed CVA, which would only go ahead once it gains the approval of at least 75 per cent of creditors – which includes landlords. As part of the proposed CVA, Clarks could potentially shutter up to 50 stores, affecting hundreds of jobs, while the remaining sites switch to a turnover-based rent model. Clarks trades from about 345 stores in the UK, employing thousands of people. Earlier this month, news emerged that Clarks was mulling a CVA because a proposed £100 million rescue deal from Hong Kong-based private equity firm LionRock Capital was contingent on creditors approving the insolvency measure. Clarks’ pension trustees are also expected to play a significant role in the vote on the CVA proposal, and were last reported as working with advisers to secure new investment for the retailer. If a deal is completed, it would see the footwear chain’s founding family shareholder renounce majority control for the first time in its 195-year history. Clarks first revealed discussions about a share sale back in May, with around £100 million and £150 million likely to be injected into the business as part of any deal. Chief executive Giorgio Presca said at the time that its new strategy Made to Last would aim to transform it amid the pandemic. Clarks also said the strategy would result in 900 job losses over the next year or so, and the creation of 200 new roles during that same period.
M&S creates 500 jobs amid digital-first Christmas strategy
Marks & Spencer has revealed plans to create 500 seasonal jobs in online distribution as it prepares to deliver its “most digital Christmas yet” amid ongoing Covid restrictions. M&S said the new jobs will consist of fixed-term contract staff at its online distribution centre Castle Donington, and they will be in addition to the 400 permanent roles that were announced in July. The retailer said that the total of 900 new roles mean its total staff numbers would increase 30 per cent year-on-year to approximately 4000. As part of its Never the Same Again programme, M&S said it was turbocharging growth on its website to reflect the accelerated shift to online shopping seen during the pandemic. In August, M&S reported a 39.2 per cent increase in its online sales and has seen over 1.5 million new downloads of its popular app since the relaunch of its Sparks loyalty scheme in July. The retailer added that customers were already turning to online for festive inspiration, with Christmas-related searches up 80 per cent on last year. M&S said that all of its new staff would be trained in a minimum of two of the four core tasks – receiving products, putting products away, picking products and packing products – as part of its wider commitment to build more flexible, efficient teams across the business. The retailer highlighted that its Castle Donington, Leicestershire, site has already adapted with “robust” hygiene and social distancing measures in place – from door closing devices to increased cleaning schedules to perspex screens between workstations. Since it first opened in 2012, the Castle Donington warehouse has utilised automated technology and M&S said that ahead of this Christmas, it would roll out new “Autobagger” machines that can each pack 2000 items every hour, and are powered by 100 per cent renewable energy. M&S is also hoping to make the most if the Castle Donnington’s newly-built mezzanine floor by aiming to dispatch 75,000 items through updated picking and packing IT technology. In comparison, the record despatch from the mezzanine last year was 50,000 single items. “We’re set up to ensure our colleagues can safely help our customers shop online with confidence this Christmas – from great new team members to investing in our tech,” M&S head of clothing and home logistics Paul Burns said. In addition to improvements at Castle Donington, M&S said teams at 140 stores are already picking online orders, for click-and-collect and home delivery. The retailer added that it has an additional 100 stores set up and ready to pack orders in response to local demand. Finally, throughout November M&S said it would extend its new contactless click-and-collect service to a further 12 stores including Hedge End, Epsom and York Vangarde. The retailer said that due to the pandemic, over 40 per cent of M&S parcels are now collected at an M&S Food-only stores versus just 30 per cent last year.
Debenhams suitors given three-day deadline to make £300m rescue bid
Debenhams bidders have reportedly been given until the middle of this week to make a £300 million rescue bid for the department store chain. Debenhams’ future remains uncertain as prospective buyers, such as Mike Ashley’s Frasers Group, have been told to make a binding commitment by the close of business on Wednesday, or exit, The Sunday Times reported. Meanwhile, advisers are weighing up alternative options for the business, which could liquidate the company or offload parts of the business to the group of hedge funds that owns its debts, led by Silver Point Capital. Debenhams went into administration again in April to prevent winding- up orders from creditors. In April 2019, the department store chain fell into the hands of hedge funds and banks, after struggling for years to stay afloat. At the time, Frasers Group lost £150 million on the debt-for-equity swap. Earlier this month, India’s richest man Mukesh Ambani dropped out of the race to buy Debenhams. Ambani’s Reliance Retail emerged last month as a possible suitor to make a bid on Debenhams. At the time, Ambani was one of a small number of interested parties in discussions with advisors to acquire all or part of the embattled department store chain. Nevertheless, Frasers Group is understood to have made an offer of about £125 million. Ashley’s empire is also thought to be interested in stores that can be converted into Flannels or Sports Direct shops. The department store chain also began the sales process of its Danish retail business Magasin du Nord earlier in September in a bid to generate between £150 million and £200 million. Debenhams has 124 stores in the UK and 12,000 workers.
Royal Mail to create 33'000 Christmas temp jobs amid surge for online shopping this winter
Royal Mail will create a record number of temporary Christmas jobs this year, with consumers expected to stick to online shopping as a result of coronavirus and national lockdowns.
The company said it will look to recruit 33,000 seasonal workers this festive period, amounting to two thirds more than its usual Christmas temporary staff uptake.
“During these unprecedented times we believe it is critical that Royal Mail continues to deliver,” Royal Mail chief human resources officer Sally Ashford said.
“We want to do our best to deliver Christmas for our customers and support the effort on the pandemic. This helps the whole country to celebrate and stay safe during these difficult times,” Ashford added.
Many retailers will be looking at different tactics for peak trading this year, as the local lockdown measures bring changing attitudes to online and in-person purchases.
Earlier this month Sainsbury’s announced it would roll out its SmartShop digital mobile scanning technology across the majority of its stores by the end of the year.
The ’Scan & Bag As You Go’ service will be in 770 stores by Christmas.
Meanwhile John Lewis has launched its first virtual Christmas shop, allowing customers to take a 3D tour of their flagship store from their own homes.
Footage captured in-store allows shoppers to navigate through the store via their smartphone, tablet or computer for the first time, reducing the demand for in-person visits.
Flannels' new Birmingham store mars start of 17 store expansion
Flannels has opened a new 12,000sq ft store in Birmingham and announced plans to open 17 new stores between now and the end of 2021. Spearheaded by Michael Murray, head of elevation at parent company Frasers Group, a further two Flannels stores will open this year, followed by 15 in 2021. The new Birmingham store is located in the Fort Shopping Park and joins the fashion retailer’s 40-plus-store estate. The store offers products from luxury retailers such as Balmain, Balenciaga, Off White and Alexander McQueen. “After what has been a disruptive year in retail, we are really proud to be in a position to open new locations, including this new retail destination in Birmingham Fort,” Murray said. “Our next generation of elevated stores offer customers the biggest brands in luxury fashion and contemporary streetwear all under one roof.” Flannel’s ambitious expansion plans forms part of Frasers Group’s wider business strategy. “Our commitment to retail spaces doesn’t stop here, Flannels is set to open another two locations before the end of year,” Murray said. “2021 will see a huge investment to the high-street, with over 15 new stores set to open across the country.” In December, Flannels launched its largest store to date in Belfast’s Victoria Square. The 30,000sq ft store marked the first phase of the Frasers redevelopment. The store also showcases the first Flannels Café & Bar. Last year, Flannels opened a £10 million flagship store in London’s Oxford Street, which was the retailer’s 45th store in the UK.
Shoe Zone warns of 90 store closures if business rates return
Shoe Zone has warned that the return of business rates in April could see it close up to 20 per cent of its store estate over the next two years. The shoe retailer’s chief executive Anthony Smith said the current system is “antiquated” and if it is introduced, Shoe Zone will be forced to close up to 45 stores prior to April and a further 45 stores in the 12 months following. “The suspension of business rates in April 2020 was a significant benefit for our business in FY20 and was in line with the government’s desire to save the high street,” he said. “However, the government has announced the reintroduction of the antiquated business rates system in April 2021 and, to make matters worse, has delayed the revaluation. Never has the rating system been more unfair.” Smith also said the retailer’s rates as a proportion of rent have “increased from 26.4 per cent in 2009 to 54.3 per cent in 2019 and forecast to be close to 60 per cent in 2021″. “The latest revaluation delay will be even more costly as rents during the period have fallen significantly further and consequently rateable values should have fallen broadly in line with rents,” he said. “This is unsustainable for most high street retailers and closures will continue unabated until the government makes substantial changes.” Shoe Zone saw its revenues drop by 24 per cent to £122.6 million for the 52 weeks to 5 October, exacerbated by “challenging” trading conditions in the second half. It now expects a loss before tax for the period in the range of £10 million to £12 million as a result of the closure of its store estate due to the late March lockdown. Since reopening in June, retail sales have been down broadly 20 per cent year on year, with online sales up around 100 per cent. Shoe Zone ended the year with 460 stores, having opened 10 Big Box stores and closed 40 stores during the period. The retailer closed the financial year with a net cash balance of £6.3 million, down from £11.3 million the previous year. No dividend will be paid for the year, and the board does not expect to be able to be paid again until at least the 2024/25 year.
Shop prices drop as retailers battle it out to keep inflation low
Shop prices have continued to drop in October as retailers go head to head in a battle for consumers’ more limited spend. Research found that shop prices dropped by 1.2 per cent in October, compared with a 1.6 per cent decline in September, as retailers used discounting to drive sales. This was below the 12-month average price decrease of 1.1 per cent, but above the six-month average price decrease of 1.6 per cent, according to the latest figures from the BRC and Nielsen. Non-food prices fell by 2.7 per cent in October compared with a decline of 3.2 per cent in September, as restrictions and a rise in unemployment meant consumers limited their spend. This is in line with the 12-month average price decline of 2.7 per cent, but above the six-month average of 3.4 per cent. Food inflation remained steady at 1.2 per cent in October, driven by an acceleration in fresh food inflation of 0.4 per cent for the month, combined with an easing of ambient food inflation of 2.3 per cent. “Once again, it is good news for consumers with shop prices falling in October, albeit at a slower pace compared to the previous month,” BRC chief executive Helen Dickinson said. “As the retail industry began to see sales bounce back, non-food prices saw the shallowest decline since the start of the pandemic. “However, given the wider economic context, with stricter restrictions and a possible rise in unemployment, we are likely to see continuing discounts in non-food for months to come. “Meanwhile, food inflation remained low as supermarkets fiercely competed with one another to offer the best quality goods at the lowest prices.” Nielsen head of retailer and business insight Mike Watkins added: “With pandemic restrictions extended, shopping behaviour has been in a holding pattern as households adjust to new ways of working, living and spending. “To help sales volumes, non-food retailers are limiting any price increases coming through the supply chain and food retailers are continuing with the lower prices introduced in recent weeks. “And should the recession and the growth in unemployment have a further impact on consumer spend, we can expect shop price inflation to remain low for the rest of the year.”
Next sales drop 17.9% amid fears of forced store closures
Next has raised its full-year profit forecast after sales beat expectations in the third quarter, but has warned on uncertainty affecting its trading in the fourth quarter. The fashion retailer’s online sales were up 23.1 per cent in the third quarter, offsetting a 17.9 per cent drop in retail sales. The business, which does more than half of its sales online, said overall sales were better than expected, up 2.8 per cent in the three months to October 24, compared with the same period a year ago. Home and children’s clothing continued to perform strongly but demand for formal and occasion clothing had slowed down. The retailer is now expecting a full-year pretax profit of £365 million – £65 million more than forecasted in September. However, Next said there is a “high degree of uncertainty” in the estimates, with the biggest fear being a decision by England, Scotland and Northern Ireland to close non-essential shops. In Wales, a full-force lockdown has already taken place, with shops only being made to sell essential products. Next said that such a closure for two weeks could see its full-price sales fall by up to 20 per cent for the fourth quarter, while further local lockdowns could result in an eight per cent. Nevertheless, the retailer said it was “well prepared” to operate effectively for Brexit – whether the UK agrees a trade deal with the EU by the end of the transition period or not.
John Lewis to begin converting 45% of London flagship into office space
John Lewis has been given the green light to convert almost half of its London flagship store on Oxford Street into office space, as it scurries to return the business to profitability. The department store has had a presence in the capital since 1864, and was granted permission by Westminster City Council after drawing up plans for the site. The council’s planning sub-committee voted unanimously “on the basis of exceptional circumstances to justify the loss of retail floorspace”. John Lewis could now turn 45 per cent – which equates to floors three to eight of its Oxford Street branch into dual use space. These floors currently host kitchen and bathroom products, electrical goods and children’s toys and books. The changes would leave retail covering most of the basement, ground, first and second floors. Flexibility to use its footprint for retail or offices gives the company the “opportunity to invest in the retail store for its long-term future”, the council said. It said offices could bring a new customer base for John Lewis. A new office entrance was also proposed on the corner of Holles Street and Cavendish Square. Last week, planning permission was granted to fellow department store chain Debenhams to partially turn the fourth and fifth floors of its London flagship into offices. The conversion is part of John Lewis’ turnaround plans to return the business to profitability, particularly after swinging to a half-year loss and axing staff bonuses for this financial year. For the interim period ending July 25, the parent company of John Lewis and Waitrose made a pre-tax loss of £635 million – a dramatic plunge compared to the £192 half-year profit it recorded this time last year. However, on an EBIDTA basis, it made a loss of £55 million – a similar figure to what it recorded in the half-year period last year. At the time, John Lewis Partnership chairwoman Sharon White said the business applied for planning permission to transform up to three floors of the Oxford Street store into office space for rent. While no indication of the plans were revealed in its interim results, White has previously said she would look at downsizing stores as part of plans to reshape the business for the future. She also expressed interest in transforming some of the partnership’s stores into housing for rent.
Online spend to overtake high street sales this year in first ever truly digital Christmas
Online spending is due to overtake physical store sales for the first time ever this Christmas rising to a “record-breaking” £39.41 billion.
UK shoppers are expected to spend around £78 billion on Christmas presents and food this year as growing financial uncertainty means sales will be “roughly the same as last year”.
However, according to research from ParcelHero, a far larger portion of the UK’s budget will be spent online over this year’s “Covid Christmas”.
“Last Christmas, we spent £25.43 billion online and £53.15 billion in stores,” ParcelHero’s head of consumer research David Jinks said.
“This year, our research shows the situation will be reversed and we’ll spend more online than offline in the first truly digital Christmas.”
The Office for National Statistics (ONS) reported online sales growth of 53 per cent throughout September, which ParcelHero predicts will grow to 55 per cent in October meaning “online shopping will rise to a record-breaking £39.41 billion”.
“We don’t think it’s likely we’ll see a massively increased overall spend this Christmas, as people are concerned for their jobs because of the impact of Covid and Brexit, which looms just seven days after Christmas,” Jinks continued.
“So, assuming Brits spend roughly the same as last year, that means in-store shopping will correspondingly drop considerably to £39.17 billion.”
TikTok users will now be able to shop from nearly 1 million Shopify retailers
TikTok users will soon be able to purchase items as they scroll through the app as the social media giant makes its biggest push yet into ecommerce.
The Chinese short-form video behemoth has signed a new partnership with Shopify allowing its retailers to begin advertising and selling goods through TikTok.
Shopify, which now provides the ecommerce platform for over 800,000 brands, will allow its merchants to connect to a “TikTok for Business” account and post videos featuring “shoppable ads”.
Users can then click through to retailers’ Shopify pages while scrolling on TikTok to complete the purchase, enabling Shopify’s merchants to keep hold of transaction and buyer data.
The tie-up will launch in the US this week, before rolling out across Europe and Asia early next year.
TikTok has been exploring ways to push into retail outside of China for some time, but has been largely hindered by the Trump administration’s attempts to ban the platform in the US over security concerns.
The move also follows a growing shift towards ‘social commerce’ from the world’s largest social media platforms like Facebook and Instagram.
TikTok is hoping to cash-in on the high engagement levels of its users compared to its social media rivals, providing an effective means of for retailers to advertise directly to its hundreds of millions of Gen Z users.
“We’ve seen that our community loves connecting with the brands they’re passionate about,” said a TikTok spokesman.
Shopify meanwhile has seen its sales skyrocket during lockdown, rising nearly 100 per cent during its second quarter to overtake Ebay for the first time.
Shopify’s Satish Kanwar added: “It was obvious early on how (TikTok) was starting to influence commerce trends and trajectories.
“With direct-to-consumer brands, that relationship between storytelling and entertainment and the product they sell is so close.
“We believe video is the default form of communication online today. We are very eager to see how video and commerce can expand.”
Selfridges and Royal Mail announce post office pop-up for Christmas
Royal Mail on Thursday announced a new partnership with Selfridges to offer a ‘one stop shop and ship service’ for customers. Launching on November 12 and running until January, Royal Mail at Selfridges will allow customers to send Letters to Santa and ship their Selfridges purchases whilst still in store. Selfridges’ Oxford Street store will have a dedicated Royal Mail pop-up space designed to make buying and sending Selfridges purchases for Christmas as easy as possible. Customers will be able to have their presents gift wrapped and delivered by Royal Mail, bringing the so called ‘bespoke postal service’ back to Selfridges 80 years since the last outlet closed. Pillar boxes will also be available in Birmingham and Manchester Selfridges stores for younger customers to post their Letters to Santa. “Our postmen and postwomen will be delivering even more of the nation’s most treasured gifts this festive season, so we want to make the whole experience as magical as we can. Doing this in partnership with Selfridges is guaranteed to add the Christmas sparkle to top this off. From everyone at Royal Mail, stay safe and get ready for a very merry Christmas with Royal Mail at Selfridges,” said Royal Mail chief commercial officer Nick Landon. “We are excited to team up with Royal Mail and to bring such a bespoke postal service and offer to our customers right in time for the busy holiday season,” Selfridges Store Director Meave Wall said. “More than ever, we value the decision customers are making to shop with us and, in return, we’ve done our best to bring to them a unique product offer and an array of services to make their time with us pleasurable, easy and efficient at this hectic time of year,” Wall added.
Ebay Q3 beats estimates, achieves £2bn in revenue
Ecommerce giant eBay on Wednesday revealed its third quarter revenue had topped Wall Street expectations thanks to the surge in online shopping this year. With shoppers across eBay’s markets stuck at home and choosing to shop online due to the spread of coronavirus, the company saw revenue rise from USD 2.08 billion (£1.60 billion) to USD 2.61 billion (£2.01 billion) for the quarter ending September 30. EBay beat out analysts’ average estimate of USD 2.48 billion (£1.91 billion), according to IBES data from Refinitiv. “I’m pleased with the third quarter results,” eBay chief executive Jamie Iannone said. “On an apples to apples basis, we delivered results that exceeded expectations on both the top and bottom lines. Our third quarter performance reflects the strength of our newly focused strategy coupled with the enormous untapped potential of our marketplace. “As we continue our multi-year journey to become the best global marketplace to buy and sell, I am proud of the progress our team is making toward our tech-led reimagination,” Iannone added. EBay noted that its annual active buyers grew by 5 per cent for the period, up to a total of 183 million global active buyers. Looking ahead, eBay said it expects fourth quarter revenue in the range of USD 2.64 billion (£2.03 billion) to USD 2.71 billion (£2.09 billion), while analysts estimate USD 2.54 billion (£1.96 billion), according to IBES data from Refinitiv. The retailer raised its full-year sales outlook to between USD 10.04 billion (£7.73 billion) and USD 10.11 billion (£7.78 billion).
Frasers Group to open game changing new store in Portsmouth
Mike Ashley’s Frasers Group will open a new multi-brand store in Portsmouth this Saturday in the Cascades Shopping centre. Going against the grain of the majority of retailers who are looking to reduce their exposure to bricks and mortar stores, the 51,000 sq ft shop will feature Frasers’ new premium design. It will also be the first to house Sports Direct, USC, Evans and GAME, as well as a Belong Gaming Arena, all under one roof. “We are really proud to open a new retail destination in Portsmouth. Our next-generation stores offer customers the biggest brands in sportswear, sports equipment and fashion, all under one roof,” Frasers Group head of elevation Michael Murray said. “As we continue to grow throughout the UK, our ethos and commitment remains the same; we offer customers the biggest and best brands and unrivalled product choice.” Yesterday Frasers’ Flannels group announced the opening of a new 12,000sq ft store in Birmingham. It also revealed the group will open 17 new stores between now and the end of 2021, spearheaded by Murray. The new Portsmouth store will also be the first to feature Sports Direct’s inclusive mannequins and a sustainability feature wall highlighting the current range of eco-friendly products on offer. “This is a major part of Sports Direct’s brand elevation strategy that will see a huge investment in a number of new stores, while upgrading and improving existing ones across the UK. This is the strategic vision of the business as it aims to meet the demands of an ever more sophisticated consumer who is increasingly looking for only the very best brands and an enhanced shopping experience,” Murray added. The launch comes as Frasers’ Sports Direct business faces criticism for allegedly asking some furloughed shop managers to shift stock from stores to depots at the height of the Covid-19 pandemic due to online demand. Frasers Group has reportedly insisted that it did not break the rules after staff alleged that the group encouraged them to work while on the furlough scheme.
KFC to create 5400 job in the UK and Ireland
KFC says it plans to add 5,400 jobs in the UK and Ireland by the end of 2020, despite many of its outlets being in areas affected by Covid restrictions.
The fast food chain has 965 restaurants across the UK and Ireland.
The company says some of the new jobs will be funded by the UK government's Kickstart scheme, which is designed to help young people.
The 16-24 year old age group has been disproportionately hit by job losses in the pandemic.
The new jobs come at a time when the UK's hospitality sector is reeling from the effects of the coronavirus pandemic.
Local lockdowns and restrictions have forced many restaurants, bars and pubs to close, or work at reduced capacity, prompting Chancellor Rishi Sunak to introduce new measures to prevent mass job losses, when the furlough scheme ends in November.
The unemployment rate in the UK rose to 4.5% in the June-to-August period, the highest level in three years.
But amongst 16-24 year olds who are able to work the figure is 13.5%.
"This year is going to be even more challenging for young people looking for job opportunities," said Paula Mackenzie, general manager at KFC for the UK and Ireland.
"But we know that all the skills the hospitality sector teaches - the importance of hard work , delivering great service and working as part of a team - will hugely help them in the long run."
The government's Kickstart scheme, which KFC says will fund some of the new jobs, pays employers £1,500 for every 16-24 year-old they train. It is aimed at young people who are on Universal Credit and at risk of long-term unemployment.
The new posts will be in addition to the 4,300 new recruits the fried chicken chain says it has taken on since the first lockdown in March.
Britons to increase Christmas spend by £1bn
Opinion seems to be divided on whether consumers will increase their spend for this Christmas season or will tighten their belts. But a new report from VoucherCodes.co.uk and the Centre for Retail Research (CRR) says that spending will rise by around £1 billion in Britain.
Meanwhile Germany and France should see retail growth of around 2% while Italy and Spain will drop 1.6% and 2.2% respectively. For Britain, the report predicts spending in the six weeks before Christmas to rise 1.6% year-on-year for a total of £84.46 billion, The Telegraph reported.
But within that almost-£85 billion figure, there will be some quite noticeable shifts as around a third of all purchases will happen online and internet spending will increase by as much as £5.6 billion compared to 2019. Online sales should total £27.87 billion. Meanwhile, spending in physical shops will drop by 7% as a combination of lockdown restrictions and consumer anxiety about venturing out make physical spaces less attractive this year. The trend has been in the direction of rising online sales for some years, especially over the Christmas period. But the pandemic has accelerated this trend and in September, internet sales accounted for 26.1% of total retail, up 8% year on year.
Despite rising unemployment and workers who were on furlough only receiving 80% of their salaries, the report also said that household incomes have “held up pretty well” this year. This is partly because consumers haven't had to spend so much. Holidays abroad have been cancelled, weddings and other occasionwear events were put on hold, there were fewer trips to the cinema or restaurants and fewer social occasions for which to buy new clothes. Consumers working from home have also saved a certain amount of cash as they haven't had to spend their wages on things like office clothes, lunches, train fares and petrol. The report said a “significant proportion of households” will have “more money than usual to spend at Christmas” and added that “total retail sales in most countries have been fairly buoyant since the end of lockdown and there is no evidence yet that this is going to change.”
Online retail sales will top $2bn every day in November as cyber week becomes cyber month
Online retail sales are set to surpass $2 billion every day in November as ‘Cyber Week’ becomes ‘Cyber Month’.
New research from Adobe has predicted that online sales in the US will smash all previous records this year, rising 33 per cent.
“This year is unlike any in the past, and for the first time we are no longer referring to peak holiday sales as Cyber Week – it’s now Cyber Month as we dial up to Christmas,” Adobe’s international president Paul Robson said.
This extended holiday spending period is due to see US shoppers spend over $2 billion a day every day between November 1 and November 21, equating to around $56 billion.
Between November 22 and December 3, Adobe predicts this will rise to $3 billion per day, shattering all previous records.
While the spending period will be widely extended, traditional shopping events like Black Friday and Cyber Monday will remain the biggest shopping days of the year.
According to Adobe, Black Friday will see sales rise 39 per cent this year to $10 billion, while Cyber Monday sales will jump 35 per cent to £12.7 billion.
“Our data has shown that deprived of a traditional store experience since the start of the pandemic, an increasing number of consumers are flocking online at incredible speed,” Robson continued.
“This is not unique to the US, but instead is identifiable in all countries impacted by continued lockdown restrictions. Our forecasts indicate that much of that shift will be permanent.”
It comes as Amazon has begun releasing “early bird” Black Friday deals a full month ahead of the event as it hopes to cash in on the extended holiday shopping season.
Waitrose to hire over 1800 new staff in preparation for Christmas
Waitrose is set to hire as many as 1850 new order pickers and delivery drivers in an effort to meet the online sales demand in the run up to Christmas. The upmarket grocer said the new staff would be a combination of temporary and permanent new roles and will be recruited across Waitrose stores and fulfilment centres in Enfield and Coulsdon. The new jobs are expected to commence at the beginning of November and continue throughout December as Waitrose prepares for the crucial Christmas trading period. “This year our online shopping operation has more than trebled and we know that the demand for our Waitrose.com service will continue throughout the festive season,” Waitrose online director Laura Burbedge said. “Our customers are planning ahead and adding Christmas items to their online baskets, with seasonal products on Waitrose.com up 250 per cent so far in comparison with last year and turkey orders up by 280 per cent. “These additional Waitrose.com drivers and pickers will allow us to better support our customers over the Christmas period with their online grocery orders.” Waitrose said it has more than doubled the number of online slots to around 190,000 per week and recruited 1800 additional pickers and drivers since the beginning of the year. The retailer also recently announced an expansion of its pilot partnership with takeaway service Deliveroo, which now services more than three million customers from 30 stores across the UK.
Should retailers enter the toy market in time for Christmas?
Toys are likely to be on most shopping lists once again this Christmas. Yet as retailers enter the most uncertain festive trading period yet, many are searching for ways to lure in customers amid the Covid-19 pandemic, whether it be through improving ecommerce technology or launching new ranges. On the other hand, several retailers are gearing up to launch toy concession concepts. Debenhams recently launched a new concession concept called Toys At Debenhams, just in time for half term and the peak Christmas trading season. Meanwhile, Big 4 grocer Asda partnered with toy retailer The Entertainer, which will see the latter turn the toy aisles in five Asda stores into branded concessions. At the time of writing, reports are rife that the worsening state of the second wave of the pandemic could lead to another nationwide lockdown that could collide with the peak shopping season. While online shopping was already predicted to be significantly higher this year due to the pandemic in general, another lockdown could further accelerate it. James Owen, owner of outdoor toy retailer Rebo, warned that panic-buying could lead to a dramatic shortage of children’s toys before Christmas. He told The Mirror earlier this month that shoppers should order in good time, but parents should not get carried away. In addition to stock shortages, there are concerns delivery services may struggle with keeping up with demand and delivering toys and other Christmas gifts in time for the big day. “Sales of toys and games tend to see the biggest in-store and online holiday spike in the week before Christmas,” said Suzin Wold, senior vice president of marketing at software firm Bazaarvoice. “So during this year’s peak, brands and retailers can stand out by delivering a fantastic consumer experience. “Initiatives like these enable brands to listen and engage with consumers in the early stages of product discovery. “Through storytelling, visuals, and immersive in-store experiences, toy concessions present a good opportunity for these brands to create engagement.” Although Asda’s partnership with The Entertainer, which will launch early next year, the move to accelerate the in-store partnerships strategy reflects a shift in customer behaviour brought on by the pandemic, with an increasing number of shoppers looking to complete multiple shopping “missions” on a single trip. “The Entertainer are experts in toy sourcing and retailing so we are really excited to work with them and are confident their offer will prove very popular with customers,” Asda partnerships senior director Matt Harrison said earlier this month. Catherine Shuttleworth, founder of retail agency Savvy, told Retail Gazette that Asda’s partnership was a way of “getting people to expand the basket”.
“It’s a really smart move. They already have high footfall of family shoppers who are going to spend on toys this Christmas,” she said. She also said that the addition of The Entertainer in-store would increase spend and potentially create switch from Asda’s rivals. “From The Entertainers perspective, it’s a smart move as it extends their brand reach into stores with higher frequency and footfall,” Shuttleworth said. “It’s important to remember the big players in UK toys are Amazon and Argos and it’s highly likely they will take ten lions share of the market alongside The Entertainer this year.” Meanwhile, Debenhams’ Toys At Debenhams concept includes brands such as Lego, Barbie, Disney and Paw Patrol. The department store chain said it refreshed its gifting and toy brand mix for autumn/winter 2020 and has a number of new offers launching in time for Christmas. “We have thought hard about what will make shopping easier and more convenient for our customers and we want to make sure we offer a range that meets the needs of the whole family,” Debenhams managing director Steven Cook said. “We are delighted to be able to offer a really comprehensive range of toys across all our channels as we build up to a ‘giftastic’ Christmas at Debenhams.” Manfred Abraham, co-chief executive of business consultancy Yonder, said that for businesses like Debenhams that have struggled throughout the pandemic, adding extra lines of toys was not solely going to result in a bumper Christmas. However, he highlighted that it may be a valuable tool in attracting new customers to their stores. “Where the Entertainer may have previously been concerned about the Christmas season, with uncertainty over whether its stores would be able to open, it’s now been able to secure aisle space in the shops on high streets which are most likely to have the highest footfall,” he explained. “In terms of selling online, especially for businesses like The Entertainer, it’s business as usual. “Competition will come from Amazon and others, but the main bonus for this business, and indeed others doing similar initiatives, will be having access to consumers who shop in Asda, but who haven’t walked into an Entertainer store before.” Nevertheless, both Asda and The Entertainer may see an increase in weekend sales as The Entertainer doesn’t open on Sundays due to the religious beliefs of its husband and wife co-founders Gary and Elizabeth Grant. However, the move poses the risk of diluting the specialist toy market. With everything eventually being under one roof and with one buying team, it brings into question whether there will still be a diverse selection available in any physical toy stores in the future. Specialist toy retailers, such as The Entertainer and Smyths Toys, are left with a conundrum – how do they fight off the increasing competition from online and grocery competitors and grow their businesses while at the same time minimising their own rental risk on high street stores? At the same time, grocery retailers are starting to see the benefits of partnerships, especially since Sainsbury’s acquisition of Argos a few years ago. This has allowed the Big 4 grocer to open more Argos branded outlets – both standalone and within Sainsbury’s supermarkets – and diversifying its product offering into toys, electronics, furniture and more. Partnering with the toy sector is attractive to the department store or grocery market as it provides the customer with a one-stop shop and the ability to either attract incremental footfall on the back of a destination, or to persuade grocery shoppers to make impulse toy purchases. It also provides a low cost and low risk means of expanding the business without major investment in property, which gives retailers the halo effect of brand awareness that will inevitably come from marketing campaigns in the lead up to Christmas.
M&S drops clothing TV as to focus on grocery this Christmas
Marks & Spencer has reportedly ditched its TV advertising campaign for its clothing division to instead focus on its grocery offering this year. The retailer is now relying on online and influencer activity to drive its festive clothing and homeware sales, and will instead focus its marketing efforts on food, Campaign reported. M&S has created separate campaigns for its Christmas clothing and food offers since 2018. Earlier this month, M&S found that searches for Christmas products on its website have skyrocketed by 80 per cent year on year as shoppers seek to spend early this festive period. Last year, M&S’s “Go Jumpers” Christmas clothing campaign had driven a six per cent and seven per cent respective increase in sales of jumpers across womenswear and menswear. Advertising firm Odd has been responsible for the retailer’s fashion and home advertising since 2019, but activity on the account has been paused since the start of the Covid-19 pandemic. In August, M&S made note of its struggling clothing arm, reporting that its sales of clothing and home goods were “well below” 2019 levels. M&S said it wouldn’t share details of its future campaigns before launch. It said it is “focused on helping our customers shop with confidence in store and online” through a wide range of customer channels.
London landlord to selectively invest in Covid-ridden retail tenants
A high-profile London landlord is reportedly seeking to “selectively invest” in retail tenants to help them recover from the effects of the pandemic. West End commercial landlord Grosvenor Estate is in talks to take a stake in Roland Mouret, the British-based fashion designer, in an effort to boost the struggling tenants in the capital, Sky News reported. Grosvenor Estate is discussing a deal that would see it become a minority investor in the fashion label, which designs clothing for celebrity figures such as actress Scarlett Johansson and the Duchess of Sussex. Roland Mouret is a 50-50 joint venture between Mouret and XIX Entertainment, the media and artist management group founded by Simon Fuller. Grosvenor was confirming a new pool of capital on Wednesday, which it is calling its Tenant Support Fund, with aims to acquire equity stakes in a small number of its tenants’ businesses. However, the deal with Roland Mouret has yet to be confirmed but could be sealed in the coming weeks. Grosvenor is one of Britain’s wealthiest landowners and owns property in Belgravia and Mayfair. Roland Mouret’s London outlet is on Carlos Place, close to the Connaught Hotel. The fashion designer is expected to show a return to profit for 2019 when it files its accounts. Roland Mouret engaged advisers to help secure additional financing, although this has been superseded by its talks with Grosvenor.