Looks like Santa can continue to lie in as the expected early festive sales have failed to materialise and the florist sector is facing it's own issues.
Because despite expectations that an early start to festive spend might herald a return to growth in October, online retail sales have continued to remain low, falling by -11.2% year-on-year.
This is according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.
While the month-on-month surge of +11.2% proved the highest since the high streets reopened in April, this performance falls in line with pre-pandemic patterns for this time of year.
Last month’s slowdown in online sales was once again kicked off by a poor first week, down -12.5% compared to only -0.9% during the last week. While the average basket value remains high at £131 (though down from its August peak of £149), the conversion rate has fallen further (+2.9% in Oct 2021 vs +4.1% in Oct 2020), suggesting ongoing issues with stock levels, due to the pressure on the supply chain.
At a category level, beers, wines and spirits retailers are still seeing positive growth, but only just – up +2.2% compared to last month’s figures of +18.6%. The only other category to record growth was clothing – up +7.5%. Elsewhere, for only the second time since December 2019, garden sales have declined (-7.5%), while health and beauty remains the worst hit category at -23.3% growth.
Lucy Gibbs, Retail Lead for Analytics & AI, Capgemini: said “October online spending was more subdued than expected this year. Stock shortages and supply chain disruptions gave speculation that customers might start shopping earlier than usual, however this may also be having a negative effect; Conversion is down across the board compared to the last two years - 2.9% compared to 4.1% in 2020, with stock outs and lack of stock depth contributing to customers leaving the funnel.
Consumer confidence has also dropped for a third month in a row as financial concerns build due to increasing inflation and interest rates and climbing covid rates, providing a cautious backdrop ahead of the peak season this year. Campaigns for Black Friday are ready and waiting, however will these be enough to draw the share of wallet this season?”
Strategy and Insight Director at IMRG, Andy Mulcahy commented “The potential for Christmas shopping to get underway early this year did not really materialise in October, but it is evident that retailers are certainly trying to get it moving in early November. Of the 317 retailers IMRG is tracking every day, 25 had their Black Friday campaigns live on Wednesday 3rd November versus only 14 on the same day in 2021.
In terms of sales performance, it seems to be a mix at the moment, and this may be what characterises peak trading as some are better positioned with their stock levels than others. A poll IMRG ran of 50 retailers on 4th November found that half were seeing activity on their sites ‘below expectation’, while it was ‘above expectation’ for around a quarter. There could end up being quite a sharp divide between who does well and who does not this festive period.”
What's happening in the flower world
Whilst there is no hard statistical information for the florist sector - be it traditional bricks & mortar shops or on line players - it would seem that October was its traditionally quite time, but for many felt a LOT quieter given the huge volumes seen over the past 20 months.
Whilst the majority of florists we have spoken to are confident of a strong ... if last minute as always ... Christmas trading period, real life wreath workshops are selling fast with customers eager to get back to normal life but in some parts of the UK where tighter restrictions are either in place or likely to increase, florists are continuing to offer pre-packed kits and online tuition.
However dry goods supply is causing a big issue with many wholesalers reporting delays and shortages.
IS Sundries have emailed customers to say baskets will not arrive till mid December and Whittingtons on Covent Garden Market are still waiting for many of their Christmas lines to arrive whilst glassware is at a premium across the board.
Others, like Tom Brown, are taking on more storage space to accommodate higher stock holdings to make sure they can offer a full range for the upcoming peaks but obviously that is a big investment. Over in the States it's a similar story with cold glue and foam products now apparently like gold dust.
However on the container front some enterprising florists are offering a return and re-use idea whereby customers bring back their old containers - sometimes receiving a discount voucher for future purchases. Whilst it can result in some less than wonderful items it can also produce some gems and of course works within the whole recycle/re-use concept which is now very much on trend.
Flower prices continue to remain high and volumes low as big box companies scoop up production and even buy farms to ensure supply. With air freight at a premium this puts even greater pressure on the market, not helped by rising gas prices; increases that are making some growers in Holland and Poland seriously consider the viability of continuing production.
If they do pull out that will create yet more shortages and price rises so, as always, The Florist Magazine's advice is to;
monitor and review costs on a fortnightly basis to make sure you retain margin and profit
order early if you can get fixed prices - although we know not everyone is willing to offer these at the moment
keep your Christmas collections tight in terms of number and flower selection
keep up the marketing even if customers aren't biting just yet ... you want to be the order point when they do
make sure you have a clear substitution policy.
However as our Editor says, rather than putting a substitution policy in small type and being embarrassed about it, take ownership of it.
Make it big and bold and use it as a positive message that as a professional you will only use what is best for the customer and that to create the best experience you'd rather use something different than give a second rate service. Not only does it show you care but that you know what you're doing!
