It remains hard yards in retail with volumes slowing -3.2% in December, significantly more than expected according to CBI and the ONS. It’s been a slow start to 2024 with Watches of Switzerland, JD Sports and Burberry all issuing profit warnings as UK inflation dampens demands as well as international price wars and a less engaged Chinese market.
Unfortunately, more of the same is forecast for non-food retailers through Q1, although GFK are reporting improved consumer confidence in the UK, with the index edging up three points to -19 in January, reaching a two year high. No doubt this improvement will take a few months to work through the system and translate to sales but maybe a chink of light on the horizon in an otherwise bleak retail environment.
Retailers and brands should undoubtedly protect their margins, minimise holding too much stock, closely measure any investment and find as many efficiencies as possible BUT not pull back on marketing. In the short-term performance marketing can help the sell through of stock, improve cash liquidity and acquire new customers but long term it drives market share and delivers the best ROI of any business function. Marketing investments made now will mature later when the retail markets is in growth again, delivering more sales and better margins.
Retailers should have a diversified multi-channel plan but specifically in Comparison Shopping - without the right technology stack, some brands are paying 20% extra on Google Shopping Cost Per Click. Productcaster can make marketing budgets work even harder by providing 20% reductions in CPC's. As Google Premium CSS Partner, we’re always up to speed with the latest developments, advice and guidance, which we pass straight to our clients.