The annual influx of tear-jerking and thought-provoking Christmas ads is as synonymous with the festive season as Father Christmas and roast turkey. And retailers try ever more elaborate ways to win the hearts, and wallets, of consumers.
John Lewis was the big winner last year with its Monty the penguin campaign. According to communications agency Waggener Edstrom’s Brand Agility Index, which is based on engagement, originality, differentiation and relevance, the retailer scored an average of 49 points over the five weeks to Christmas – the highest of any retailer – while sales increased 6% to £777m year on year.
But there is more to Christmas marketing success than an ad that goes viral, so what can brands do to ensure they hit the right note with consumers across all channels and leave a lasting impression?
Lingerie retailer Ann Summers expects mobile to be a critical driver this year, particularly as 60% of its traffic comes from mobile devices. “We have optimised our mobile experience over the past 12 months and have seen the fastest conversion growth from mobile,” says marketing manager Ashton Wainwright. “This year, we have launched a fully responsive website to further enhance the mobile experience with a key focus on improving page load times, which is so important for users.”
Indeed, mobile traffic to UK retail websites hit 57.4% in March 2015, up from 36.2% during the same month in 2013, according to IBM’s Digital Analytics Benchmark. Mobile sales have also seen a steep incline over the past two years, with mobile devices accounting for 39.2% of all online retail sales in the UK in March this year, compared to 25.2% in 2013. Yet data also shows that average spend per visit is lower on mobiles than other screens and desktop is still responsible for the majority (59.9%) of online sales.
In anticipation of the busy festive period, upmarket department store Fortnum & Mason overhauled its digital offering in April to join up its well-established offline experience with the online offer. Senior marketing manager Alyson Walsh says the retailer recognises the role online plays for consumers in researching gifts and products prior to purchase whether in-store or online.
The “easier-to-shop website” is designed to simplify the process while giving customers the option of sending gifts to multiple addresses across 130 countries and a click-and-collect service. Since the roll-out, the retailer has seen a 77% increase in visits year-on-year, while mobile conversion is up 57%. Christmas officially launches at the store in the first week of November, when its festive window displays are unveiled and its brochure lands on doormats.
“Both are always eagerly anticipated by our customers and generate a lot of excitement, which translates into social media activity across several platforms,” adds Walsh. The retailer will also be building on its experiential activity by partnering with outdoor ice rink Skate at London’s Somerset House for the second year.
Replicating previous success
Handmade cosmetics retailer Lush is keen to repeat the achievements of its marketing activity in 2014. “Last year, we launched our short film ‘The Experimenter’, which was an artistic exploration of colour and sound inspired by the social trend for ‘bath art’ using our products,” says creative director Andy Russell.
“Since then, we have seen a huge uplift in the popularity of our bath bombs with several of our newest releases occupying the top of our bestsellers leader board. This is obviously something we will continue to develop.”
Although gifting accounts for a large proportion of festive sales, the Christmas party season also sees a lot of personal spend. Ann Summers’ Wainwright believes it is “the season to be seen” and claims it is the time when the lingerie and sex toy retailer’s female customers “invest greater time to look and feel their best”.
It is therefore critical that businesses are able to distinguish between those shopping for themselves and those seeking gifts. Luke Griffiths, general manager at eBay Enterprise Marketing Solutions, believes brands should use historic data to help tailor their marketing messages accordingly. “Shoppers that are buying gifts look for very different things to shoppers that are buying for themselves,” he says. “Gifters are often far more led by price, and want to be inspired and reassured in their purchase.”
As a result, smart audience segmentation should be a top priority for marketers looking to cash in on Christmas; Griffiths suggests “September is the best time to get started”.
Adapting in real time
However, although planning is a necessity, brands should also allow for real-time optimisation and targeting, which Griffiths believes will take hold this Christmas. “Forward planning will always have its place, but nimble brands that can respond to changing demands in real time will be best placed to capitalise on festive fads,” he says. “By staying close to what shoppers are doing in real time, marketers can establish a much more personal, immersive and relevant customer experience that inspires loyalty.”
Taking this into account, retail group Shop Direct has been working with eBay to analyse what consumers are doing in order to identify when communication will be most effective. It found that next-day delivery is most in demand towards the end of the week and for last-minute shoppers. “Brands that can harness this sort of insight in real time and plug it into their campaigns can optimise sales and get closer to giving customers what they want,” adds Griffiths.
Aligning marketing with other business functions such as sales, product development and operations is also key to achieving the best results. “There’s no point driving seasonal purchases for a specific product if there’s not enough stock or production capability to meet demand,” he explains.
The need for retailers to prepare for seasonal surges is further fuelled by the explosion of deal-based shopping events in the UK such as Black Friday and Cyber Monday. Indeed, Black Friday was the biggest online shopping day for the second year running last Christmas, with sales 91.6% higher than in 2013, according to IBM. Cyber Monday was the second busiest shopping day for retailers with online sales rising 22.6% compared to the year before. Wainwright at Ann Summers admits the popularity of both days took retailers by surprise last year, so it plans to have a much more robust plan in place to cope with demand in 2015 (see Q&A, bottom of page).
Most retailers hold off on festive marketing until after the summer but for Christmas-themed family experience LaplandUK, activity kicks off much earlier to allow time for bookings. The company’s first wave of early-bird tickets for existing customers went on sale in June and a second round will be released in mid-September before tickets go on general release at the end of the month.
“Most parents’ minds turn to Christmas once their children have returned to school after the summer holidays,” says Mike Battle, co-founder of LaplandUK. The company sends around eight emails per season and does strategic print advertising together with a fully integrated PR campaign.
Although recommendations play an important role, LaplandUK will be focusing on social media this year to increase awareness and build momentum. “We noticed last year how engaged our guests are on social media and how they use it not only to ask for advice and information on their experience, but to immerse themselves in LaplandUK before, during and after the event,” says Battle. That is why the company has decided to dedicate more time and resource to growing these channels.
“The key to LaplandUK’s marketing success is to avoid an overtly commercial tone [to remain] consistent with our brand,” he adds. “Our elves [Elva and Albin, who front the online campaign], allow us to ensure any communication with LaplandUK is fully immersive.”
Online community activity will also be critical for Lush over the festive months. “Social will continue to play a key role in bridging the gap between our online and offline experience,” says Russell at Lush. “We are looking at how we can create experiential in-store content that our customers feel compelled to discuss and share via Instagram and Facebook.”
As part of its Christmas push, Lush will also be looking to bring to life its manufacturing process, which Russell believes is “unique to the cosmetics industry” and is often the centre of much speculation. “We have exciting ideas in the pipeline, which will make use of our newly-launched Oxford Street shop in London, plus an international roll-out of the latest winter collection of products,” he adds.
In addition to the in-store experience, Lush will be looking to engage customers through its recently developed mobile app. “We are working on the latest release, which will continue to allow customers to shop by scent and feeling, but will also include our new ‘shop finder’ feature and an improved product browser,” adds Russell.
There is no denying that Christmas poses a massive opportunity for retailers; the big winners will be the ones that fully engage consumers and strike the right chord.
Which channels will be particularly important for Ann Summers this Christmas?
Christmas amplifies consumer demand and our focus is to make their purchase as accessible and simple as possible.
Different channels have different peaks and troughs across the season. Party Plan [Ann Summers shopping events held at organisers’ homes] is strongest at the beginning of November; in ecommerce we see trading highs during mid-December as people rush to buy in time for last delivery; and [in-store] retail sees its best performances up to Christmas Eve, with the ‘guy-buy’ shopper driving last-minute impulse and panic purchases.
Recognising these sales patterns makes our marketing approach much easier [as we can] focus investment and relevant activity to the customer at specific points.
How much focus do you give shopping events such as Black Friday and Cyber Monday in the run up to Christmas?
Last year, we saw record online sales over this weekend so it will be a key trading period. This year we believe it will be at least the same or bigger, so it’s about ensuring we maximise both sales volume and margin over these days again.
Due to the unforeseen demand and pace of these key selling dates last year, which took the high street slightly by surprise, we have a much stronger strategic plan to keep us in line with the competition and consumer expectation.
Do you have any examples of activity that worked particularly well last year that you will be developing this year?
Our focus towards gifting last year proved a strong move for the brand and remains a key driver this Christmas. Our core product categories, including lingerie, novelties and sleepwear, will be strengthened with new options and till-point lines brought in to target further customer segments.
The Rabbit [an Ann Summers sex toy] will have a much stronger prominence this Christmas and is a real indicator of our branding style moving forward.