Only online retailers benefit from Christmas sales
The Christmas shopping season is now entering its hottest phase. The big Black Friday and Cyber Monday promotions, with which American retailers traditionally ring in their holiday business, have just ended. These discount campaigns have also arrived in Europe, primarily through online retail. Can bricks-and-mortar retailers even keep up or will Germans soon only be buying their gifts online? The crowds of people pushing their way through the major shopping streets in Germany on Saturdays in the fall, especially Frankfurt's Zeil, speak a different language. Michael Hartwig, Managing Partner of Yext, has taken a closer look at the issue:
Check 1: Promotional days and a huge selection - traditional retailers can no longer keep up with the range offered by online retailers.
Of course, promotional days are not an invention of online retail, they have been around for much longer - just think of winter and summer sales. The term "Black Friday" became established in the USA in the 1980s as a description for a day with special discounts. Such promotions, which originated in the retail sector in the USA, can of course also be used by brick-and-mortar retailers in this country. However, they must bear in mind that the customer journey today often begins online and ends in-store. Smaller retailers also need a well-maintained online presence where customers can find basic information, such as opening hours. In the case of discount campaigns, consumers also need as much detailed information as possible: How much can you save? How long does the promotion run for? Compared to the almost endless range of online stores, bricks-and-mortar retailers can score points with their personal experience and competent advice.
Check 2: The Christmas business is increasingly becoming an online business.
Although online retail has seen enormous growth in recent years, most Germans (53%) still prefer to buy their Christmas presents in a traditional store. A further 26 percent have no clear preference, meaning that only 21 percent explicitly prefer online offers. This is the result of an annual study by management consultants EY. On average, Germans want to spend 282 euros, an increase of six percentage points compared to the previous year. Retailers therefore have the opportunity to increase their own sales compared to the previous year. However, bricks-and-mortar retailers should not rest on their laurels. The way the growth rates of online shopping are looking, they could soon lose out - if they do nothing. Traditional retailers also need to think about how they can adapt their business model to the digitalized world and learn from their online colleagues. This involves, for example, the collection of online orders in-store, reliable online information and product reviews.
A particular advantage of local retailers is that customers can take the goods they have purchased directly with them. This sounds trivial, but parcel services reach their capacity limits, especially in the run-up to Christmas, and it is not always guaranteed that orders will arrive on time.
Check 3: Only large companies benefit from Christmas sales?
It is true that the biggest beneficiaries include well-known brands that dominate the pedestrian zones with their stores, but are also active online. Smaller specialist retailers, on the other hand, are often among the losers. But they also have strategic advantages: Individualization is the trend these days anyway and many people deliberately don't want to buy mass-produced goods, especially when it comes to gifts. They are therefore prepared to spend a little more in specialist stores. Smaller specialist retailers generally also have a more intimate relationship with their customers, which they can use for more personalized advertising or special events. However, small businesses cannot rest on this intimate relationship. If you only have regular customers, it will be difficult in the long run. That's why small businesses in particular must not have false information online, because if a potential customer doesn't end up getting what was advertised on the Internet or even stands in front of a closed door, they will be disappointed and will definitely not become a new regular customer.
Conclusion
Even though most Germans still prefer to buy their gifts in-store, bricks-and-mortar retailers cannot rest on their laurels. After all, the growth of online retail continues unabated and the digital world can no longer be ignored. With digital knowledge management, brick-and-mortar stores can stay true to their local charm but not lag behind the ever-changing world. Companies can use it to keep their opening hours, addresses, telephone numbers, etc. up to date online at all times and everywhere, but can also advertise events or manage user ratings. In short: companies organize their digital knowledge centrally. Because even if Germans often buy offline, they usually research the best offers and shopping opportunities online in advance and if the information on the web is then incorrect and, in the worst case, customers are left standing in front of closed doors, this damages every company. According to a Yext survey, three quarters of respondents (75 percent) then buy from the competition and 48 percent go home frustrated or order online.*
