By Daniel Hunter
£3.5bn of Christmas retail sales will be purchased on or influenced by smartphones, according to business advisory firm Deloitte.
The influence of smartphones far outweighs the value of direct sales made through them, with consumers using their device to research prices, store Christmas shopping lists, engage with friends and family using social media, but also increasingly to make payments for goods.
Deloitte anticipate around £3.2bn of in-store Christmas sales will be influenced by smartphones, with another £330m of sales made directly through the devices. A further £500m in sales will be made through tablets.
Deloitte also forecasts another strong year for online retail with sales increasing this Christmas by 17% with total UK retail sales edging up by 1%.
“We remain cautious on the long-term outlook for UK retail, but there are more reasons to be optimistic than pessimistic this Christmas," Ian Geddes, UK head of retail at Deloitte, said.
"Consumer confidence has gradually improved over the course of the year and despite the recent increase in inflation, it is much lower than it was 12 months ago easing the pressure on households. Whilst it is not certain whether this will translate into higher spending, with consumers continuing to show a desire to save, we believe it will be enough to generate modest growth.
“However, whilst we forecast the value of retail sales to be in positive territory, once you account for inflation running at 2.5%, this equates to a fall in volume. Yet with retailers increasing their focus on stock control we would expect to see better use of strategic, targeted sale activity as opposed to the blanket application of discounts across stores seen in recent years.
“As food prices continue to increase, we would expect general merchandise to be flat at best and very possibly experience a slight fall as consumers decide to save the Christmas dinner. However, this hides a more complex story. Increasingly, we are seeing examples of certain retailers performing strongly and others weakly within the same sector. Shoppers are responding to those retailers that combine the right products with exceptional customer service across all channels, dynamic and exciting online and mobile sites and a brand that they want to be associated with and invest in.”
Colin Jeffrey, head of multichannel retail at Deloitte, added: “As with recent years, the strongest growth will be found online, with purchases completed on mobile phones double or even triple that of last year. It is also going to be a click-and-collect Christmas with those retailers who have invested in this service in line to do well as these customers spend more and collections drive footfall in to stores. Retailers without flexible collection options and mobile services are failing to meet basic customer expectations and will suffer as a result.
“The rapid adoption of tablets and the high number received as gifts this Christmas will drive a sharp increase in transactions through these devices. However, whilst transaction growth is slower for smartphones, their broader influence is far greater. Whilst we forecast 10% of in-store sales will be influenced by smartphones in December, by 2016 we predict this figure will be as high as 18% for the full year, equivalent to £43bn of sales.
“We are also beginning to see the power of social commerce with more and more consumers using Twitter and Facebook to share reviews, offers and product information. Retailers are also starting to use social media as a forecasting tool, monitoring buzz around certain products to predict demand.”
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