A season of opportunity and uncertainty for retailers

02 December, 2020

In recent years, Black Friday has driven customers online and into stores to start their Christmas shopping. While retailers were able to leverage online sales this year throughout the COVID-19 pandemic, store closures inevitably had a detrimental effect on footfall. With the hope of a vaccine rollout on the horizon, retailers and consumer goods companies are  anticipating a holiday season that brings some Christmas cheer for the sector and the promise of a better year in 2021.

Top down view of online christmas shopping and gifts

Footfall data, provided in anonymised form by Three Ireland, highlights the negative impact that the recent lockdown had on Dublin city centre footfall during this year's Black Friday weekend. Footfall movements in the Grafton Street area declined by 36% when compared to equivalent shopping days in 2019. Based on the Three Ireland data, 2019 saw an average of 90,245 footfall movements occurring through the Grafton Street area per day over the Black Friday period compared to 57,747 in 2020. Although the majority of stores were closed, the drop in footfall was less severe than the first lockdown as schools, non-essential retail and takeaway food service operators remained open. (Three Ireland data is fully aggregated and anonymised to ensure no personal data is shared).

What does the future for the retail sector look like? It is clear that bricks-and-mortar retail plays a key role for retailers, but online must play a fully integrated role. The social and experiential elements of retail are still in demand. In the PwC Retail & Consumer 2019 report, 54% of consumers stated that they shop in-store weekly or more frequently and will still want to go to stores, but it will not be without its challenges. 

But lower footfall volumes may leave unfulfilled potential revenues for retailers across Ireland. The importance of commuters and their impact on high street footfall cannot be underestimated. With many offices either closed or operating at reduced capacities in December, this also negatively impacts store footfall.

The question now is: how much of this lost retail business will return for what is left of the Christmas period? Consumer sentiment is still considerably lower than last year. When set against the backdrop of record personal savings levels in 2020 of €20 billion, as reported by the ESRI, Christmas 2020 is all to play for. There are clear actions that retailers and consumer goods companies can take to win the remainder of the Christmas season and unlock consumer spending.

  1. Balance safety with enjoyment in-store - Despite all of the challenges that COVID-19 has thrown at people this year, there is still considerable consumer appetite to get back into shops. With stores now reopened, along with services such as hairdressers, gyms and restaurants, there is an opportunity for stores to capitalise on consumer footfall. Drawing on research from the PwC Holiday Report, over two-thirds of consumers are willing to shop in-store if pandemic safety measures (e.g. masks, hand sanitisers, etc.) are in place. Therefore, retailers will have to accommodate these measures in order to drive footfall, and provide a safer shopping experience for consumers. Also, the prospect of extended store opening hours should reduce the pressure on traditional peak shopping times and encourage more consumers to shop in-store. 
  2. Ensure channel mix gives greater weight to online shopping - A clear winner this year has been online shopping, with all retail segments witnessing significant growth in online shopping. According to the Central Bank of Ireland’s statistics from January to September, eCommerce sales are up 23% on 2019’s performance. Considerable progress has been made since the first lockdown with many Irish retailers leveraging the Enterprise Ireland Online Retail Scheme to either build or upgrade their online platforms. With future lockdowns not ruled out for the New Year, it is vital that Irish retailers continue to build resilient digital and eCommerce capabilities, as well as the supporting supply chain capacity to meet growing consumer demand which is unlikely to abate in 2021.
  3. Capitalise on convenience - The PwC Holiday Report also found that 61% will use online as part of their 2020 Christmas shopping. With some customers perhaps reluctant to visit stores, retailers need to become more innovative and offer flexible collection and delivery options. Globally in 2020 there has been a proliferation of kerbside pickup and click-and-collect services, to cater to more cautious consumers. This minimises costs and risks, as well as providing goods to consumers faster through quicker fulfilment. For those customers who choose to visit stores and then face the challenge of queues, this is a prime opportunity for retailers to engage with the customer as they spend time waiting to enter the store. Store greeters could check stock availability, sign customers up for loyalty cards, but overall ensure their queueing time is positive.
  4. Leverage consumers' growing appetite to shop local and “buy Irish” - With the Irish economy reeling from a tumultuous year, consumers recognise the importance of buying Irish. A number of recent initiatives, including the Green Friday shopping campaign and the new Guaranteed Irish Gifts website, encourage consumers to shop local and support small Irish businesses. Last year in our 2019 Retail & Consumer Report, two-thirds of consumers said they will buy Irish products to support the Irish economy. It is important to convey this image to consumers who will be eagerly anticipating Irish, seasonal offerings. 2020 has certainly seen considerable consumer interest in shopping local and it is expected that this trend will continue over the Christmas period.
  5. Turn data into rich insights - With new digital capabilities, such as website analytics and online customer support software, there is an opportunity for retailers to gain new insights that are now available as a result of the growing online channel share. These capabilities provide retailers with a better understanding of their customers which, if leveraged correctly, can optimise and enhance business performance.

We are here to help you 

Many businesses are building new capabilities, such as scaling up eCommerce capacity, developing cyber security defences, and providing seamless online customer service. At PwC, we have a number of services, including strategy and supply chain, data and analytics, cybersecurity, digital and people that can help you to navigate through uncertainty and build resilient capabilities to combat future disruption. Contact us today.

Contact us

John Dillon

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 6415

Owen McFeely

Director, PwC Ireland (Republic of)

Tel: 353 1 792 8162

Martin Duffy

Director, PwC Ireland (Republic of)

Tel: +353 1 792 6552

Ruth McNamee

Senior Manager, PwC Ireland (Republic of)

Tel: +353 87 601 0605

Follow PwC Ireland