Home Business News Retailers experience a grim start to the ‘Golden Quarter’

Retailers experience a grim start to the ‘Golden Quarter’

by LLB Finance Reporter
3rd Nov 23 9:11 am

Bazaarvoice, Inc., the leading provider of full-funnel authentic user-generated content (UGC) solutions, today released its annual Shopper Experience Index, based on a survey of more than 1,000 UK shoppers.

As a special addition to the report, 100 British brands were also surveyed. The results revealed that as shoppers weigh their purchases more carefully in the current economic climate, they are spending less.

They’re also relying heavily on UGC such as ratings, reviews, and shopper photos, while utilising social media at every stage of the shopping journey, from discovery to purchase.

Survey highlights include

Consumers are changing their shopping habits due to the current economy: 77% of consumers claim to have changed their spending habits due to th Retailers experience a grim start to the ‘Golden Quarter’

  • Total like-for-like retail sales in October fell by -1.7%
  • In-store LFLs sales recorded the first negative result since February 2021
  • Online sales fell for the third time in 2023
  • Fashion in-store sales suffered particularly badly, falling -2.3%

Retailers have recorded a disappointing start to the crucial “Golden Quarter”, as total like-for-like (LFL) sales in October have declined by -1.7%, compared to last year’s positive base of +3.5%, according to new data from accountancy and business advisory firm, BDO.

BDO’s latest High Street Sales Tracker also highlighted that in-store sales fell –1% from a base of +5.9% for the same month last year, marking the first set of negative in-store sales figures since February 2021. This was reflected in online spending too, with online sales falling for the third time in 2023, down -1.8%.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “These results make for a grim start to the run up to the festive season for retailers, traditionally their best time of year.

“We expect to see retailers discounting in November as they gear up for Christmas with many marking Black Friday and Cyber Monday, but it’s likely that they will have to bring in deeper discounts than planned, as competition for discretionary spend intensifies.

“Weaker discretionary spending in the build up to Christmas will be a concern for retailers, who rely on the so-called ‘Golden Quarter’ to bolster revenues ahead of January, when consumers are usually expected to tighten the purse strings. With businesses already squeezing profit margins and interest rates and energy bills remaining high for the foreseeable future, this fall in consumer spend could be the beginning of a period of significant pain, which may extend well into the New Year.”

Sector results

It was poor month for the fashion sector, which saw total LFLs fall by -2.3% from a base of +6.7% for October 2022, as we witnessed unseasonably warm weather in the first three weeks of the month meaning consumers may choose not to freshen up winter wardrobes.

Total LFLs for the lifestyle and homeware categories also declined, despite in-store sales for lifestyle products increasing by +3.4%.

Sophie added, “We’ve seen recent reports that suggest consumers plan to cut back on spending and purchase fewer gifts during the festive period. Retailers will need to work extra hard to attract consumer spend in these conditions, including optimising product availability, in-store and online experiences as well as pricing and promotions in order to muster up some festive cheer.”

e current economy. They are choosing to make fewer purchases and spend less on practical (59%), delayable (67%), and non-essential (81%) products. Over half (55%) have maintained the same spending habits when it comes to essential products, but 22% are even reducing spending on those. To reduce their spending, nearly eight in ten (77%) of consumers are also open to trying a different brand for products they regularly buy.

Social media has become a search engine as well as a checkout counter: Less than half  (41%) of shoppers agree they’re more likely to find products and services on social media than any other channel. One in four say they often research a product through social channels, and 39% say social media impacts their purchasing decisions.

Social media’s generational divide continues via e-commerce: Globally, 73% of shoppers aged 18-24 have purchased something on social media in the last year, the same could be said for only 25% of global consumers 65 and older. Three-quarters (76%) of those global respondents aged 18-24 also say that they are more likely to discover a product through social media than any other way.

Consumer trust and confidence in their purchases rely strongly on user-generated content: 70% of shoppers feel more confident in a purchase when they view UGC, and 32% say they are relying more on this type of content in the downturn to make the right purchases. Nearly two-thirds (62%) say they trust UGC more than brand-provided content on product description pages, and 39% claim they are unlikely to buy a product without shopper content to inform their decision.

“This year’s study underscores the economic impact of shoppers’ behaviours profoundly,” said Zarina Lam Stanford, CMO at Bazaarvoice. “As consumers around the world continue to rely on fellow shoppers for advice, and social media as their first source for product discoveries, purchases, and even brand loyalty, it is high time for product and brand practitioners to reassess our content and channel strategies to heighten shopper engagement and decisions.”

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