UK retailers seek better payments as they brace for turbulent Christmas
Black Friday, which has come to herald the start of the UK’s festive shopping season, may not deliver its usual hype and spikes in 2021. But in the face of supply shortages and inflationary pressures, merchants may be smart to circumvent the usual fanfare. In a bid to avoid a run on stock and to play down expectations of big sales without harming the bottom line, nearly half (47%) of UK merchants have invested in early marketing campaigns to engage shoppers sooner, according to a new study from global payment solutions provider Checkout.com.
A year on from the nation’s ‘cancelled Christmas’ consumers also appear determined not to let another festive season slip through their fingers. 41% say they have started their seasonal shopping early to avoid disappointment. Over a third (36%) of Brits say they are concerned items they want to buy this festive period will be out of stock, with a quarter (28%) worried that the items they have already ordered online will not turn up in time for Christmas. Indeed, by early November 50% of UK merchants reported a definite early uptick in seasonal sales. The research also found that half (50%) of UK retailers have concerns about this year’s Black Friday weekend. Shipping costs, supply chain issues and inflation all play a part, with three in ten retailers (30%) fearing they won’t fulfil a spike in demand for goods and a quarter (25%) saying they will struggle to offer significant Black Friday discounts.
Moshe Winegarten, Retail Sector Lead at Checkout.com said:
“This year’s critical festive sales period looks set to be complicated by challenges that are beyond most retailers’ control. But there are steps that merchants of all sizes can take right now to counter the impacts of these external pressures.
Rather than being a big bang moment, we can expect this year’s festive shopping season to start earlier, be more sustained, and defined by higher-level transactions The fact that 41% of UK retailers are bolstering their digital payments when the chips are down demonstrates the extent to which they recognise how much is at stake at the checkout and that payments are a strategic issue. By reducing downtime, increasing authorization rates, offering appropriate payments options, and more precisely managing fraud and chargebacks, the UK’s merchants can quietly protect billions of earnings, at a time where every transaction really counts.”
A longer festive sales period could mean more revenue opportunities
There are signs, however, that whilst spend may be less concentrated over the Black Friday weekend, this year’s elongated festive sales period is still set to be a profitable one for retailers.
Half (52%) of UK retailers expect that consumers will spend more this Christmas than they did in 2020. And if they can encourage a steady flow of traffic over a prolonged shopping season there is cause for optimism that revenues will be healthy and that a slightly muted Black Friday might actually make for a smoother experience all round. Meanwhile, less impulsive shopping and a heightened awareness of shipping complexities may have some upsides as 71% of British consumers say they have no intention of returning a single item bought online this Christmas.
Retailers must make every transaction count
Despite the upsides, the survey data reflects the uncertainty felt by merchants and consumers alike this year as they attempt to navigate some unusual market forces. Ensuring that every potential sale is captured will be pivotal in securing a healthy last quarter for British business. This point is not lost on savvy retailers: four in ten British merchants (41%) have invested in their online payments specifically to secure maximum revenue during the important shopping season.
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