It goes without saying that 2018 has been an especially tough year for retailers.
A combination of growing competition from online rivals and changing shopping habits have resulted in numerous store closures and in some cases, retailers going into administration. Meanwhile, ongoing anxieties around Brexit and the general economy are weighing heavy on consumer moods and, as a result, pulling those purse strings ever tighter.
And it looks like a bleak Christmas is on the horizon, especially for the high street. Total retail spending is expected to rise just 4% year on year in December, according to Mintel, and the bulk of that increase won’t be on the high street. Food sales are predicted to increase by 3.3%, while non-food sales will be up just 1.7%. And amid that, online sales will increase 14% – accounting for almost 12% of all retail spending.
For most retailers, Christmas is the most important time of year when they make the vast majority of their profit, and so getting it right in the two-month run-up is absolutely crucial. Yet the downbeat attitude on the high street has hit their festive strategies.
Advertisers are expected to spend a record £6.4bn during the Christmas season this year, according to the Advertising Association (AA). But the increase is going not to TV, the usual winner at Christmas as companies look to create an emotional connection with consumers, but to digital.
The AA predicts TV ad spend will decline by 1.4% to £1.43bn in the fourth quarter, while digital media spend is expected to rise by 12% to £3.5bn. And ITV is predicting a fall in its revenues in the Christmas quarter.
This is reflected in the marked change in creative and commercial strategy for the majority of brands this year, bringing into question whether the Christmas advertising period as we know it is having a watershed moment.
Bye bye, ‘vanity TV’ project?
There is a notable lack of blockbuster ads. Instead there is a much stronger focus on products, price and value – a move driven, in some cases, by necessity rather than choice.
A number of retailers that usually produce high-impact brand advertising at Christmas have turned their back on the “vanity TV project”, as Debenhams calls it, in favour of Marks & Spencer’s “unashamedly commercial” and digital-first approach.
“The world’s moved on,” Marks & Spencer’s marketing director of clothing and home, Nathan Ansell says. “In the world of modern marketing a lot of the entertainment value comes through social sharing.”
This year there are 15 times the number of products in M&S’s new clothing and home ad compared with 2017, while its Christmas food campaign – its biggest to date – has made a significant shift to focus on the value of its food for the first time. And there is a big push on social to engage people on a more emotional level, asking them to tweet their favourite M&S food.
It would be remiss of any marketer not to be thinking really carefully about how they spend and invest to maximise return on investment.
Richard Cristofoli, Debenhams
Debenhams’s marketing director, Richard Cristofoli, sums up the mood of many retailers: “In the current retail climate in the UK, how can I look a colleague in the eye when we’re all being told we need to manage costs carefully and make sure we’re driving a simplicity focus and efficiency, and then tell them I’ve spent millions on making a vanity project TV ad?
“It would be remiss of any marketer not to be thinking really carefully about how they spend and invest to maximise return on investment.”
It is understandable why many retailers have gone down a more direct route this year. And driving those all-important Christmas sales is of course at the top of every retailer’s list.
The concern with product-focused campaigns is they fail to relate with consumers on an emotional level – whether on TV or online and they risk fading into the background amid the Christmas ad hubbub.
TCC Global’s global creative director, Neil Cook, described this year’s slate of ads as “disappointingly anonymous” and like an “unimaginative shop windows”, while Graham Page, Millward Brown’s head of global research solutions, says this approach relies too heavily on people caring about the products.
“It seems non-risky to the advertiser because you’re very clearly putting the products in front of people that you want them to buy, you want tor really push that short-term Christmas sale,” Page says. “But there is a risk that it’s not interesting enough.”
Stick with marketing you know works
John Lewis’s un-Christmassy 140-second biopic of Elton John’s life is creatively quite different from the likes of Moz the Monster, Buster the Boxer and Monty the Penguin, with many arguing that it will do more to boost Elton John’s profile (and farewell tour next year) than John Lewis’s Christmas already-flat sales.
However, while it doesn’t have any direct calls-to-action to drive people to the store or website, the campaign is true to the brand and still puts John Lewis top of mind while reinforcing its positioning as the home of thoughtful gifting.
“What we’re hoping is that we engage customers at Christmas in the way that we normally see them engage; that they will not only get emotionally connected but then make that next step into going out to buy,” says John Lewis’s customer director Craig Inglis.
Christmas gives you that opportunity to borrow something that is emotionally powerful and attach yourself to it and have something relative to say.
Graham Page, Millward Brown
Inglis adds: “Christmas tends to be different to the rest of the year. People will perhaps be cautious throughout the year and protect their spending, but when it comes to Christmas they’ll make sure they continue to make the effort for the people that matter to them. All we can do is put our best foot forward and make sure this [campaign] is the best it can be and most important of all that our shops and online are the best they can be.”
Having tried the product focus, Sainsbury’s returned to the blockbuster spot with a very John Lewis-style all-singing and dancing school nativity – perhaps a sign that 2017’s product-focused formula didn’t drive as many sales over the festive period as the supermarket hoped it would.
Consistency in Christmas campaigns has proved to be a sound formula for many retailers. Alongside Coca Cola’s infamous ‘Holidays are coming’ ad, this year saw the return of Aldi’s Kevin the Carrot, Amazon’s singing boxes and Heathrow’s bears (all of which performed well on one early-scoring Christmas ad chart), while Tesco, McDonald’s and Boots all built on past festive messages.
If consistency is one way to boost sentiment, which it looks like it is, then Holly Willoughby could be M&S’s Kevin the Carrot in three year’s time.
Experimenting with experience
What is acting as a common link for a number of retailers is an increased focus on in-store activities as businesses look to capitalise on the social shopping trend and try to give people another reason to hit the high street.
From ice-cream pop-ups and gin bars at Debenhams, to Christmas markets at Tesco, and John Lewis bringing the set of its Elton John ad to life in its flagship Oxford Street store, there has been a noticeable rise in experiential campaigns this Christmas period.
What this shows is that brands are realising that it is no longer enough for stores to merely be points of sale and that they need to offer more than the website can if they are to convince people to get off their sofas and venture on to the high street – especially with shoppers’ willingness to spend on the decline.
Debenhams’s Cristofoli says the brand wanted to create a “true gift destination” that couldn’t be replicated online, while John Lewis’s Inglis says they wanted it to feel “like stepping into Christmas on every floor”.
“It’s all building out from the core idea, amplifying the idea, but just creating some fun and experiences for customers to engage with and give them reasons to come to the shop,” Inglis says.
While a mix of media activity is important, giving people something to engage with in-store undoubtedly gives a point of difference and is one way to inject some life into both the high street and those unseasonably low festive spirits. If gin and being able to dress up as Elton John can’t get those pounds rolling, what can?
A lacklustre Christmas ad season
Kevin the Carrot has faced-off with a wicked parsnip, Elton John has travelled back in time to the moment where it all started, and Holly Willoughby has shamelessly plugged some ‘must-have’ jumpers. And yet it seems like retailers have failed to get festive pulses racing.
Just 29% of campaigns getting three stars or more out of five, according to data from System1 that predicts long-term brand impact on market share and likelihood of purchasing. This is half the 59% that scored at least three stars last year, making 2018 the worst year since the company began measuring Christmas ads.
It seems obvious to say that it is important for brands to do something that has both an emotional hook to get people talking and put retailers top of mind, and then to back it up with activity that pushes products and drives sales – on whatever medium that might be. But it feels like many have struggled to find a balance this year as they try to figure out what will work best in the current retail environment.
Too much of a focus on product and price can be overwhelming and risks turning already cautious spenders off, as well as getting lost amidst the thousands of ads and promos people will see between now and December.
“Just talking about the brand or your range is probably not that interesting,” Page says. “Whereas Christmas gives you that opportunity to borrow something that is emotionally powerful and attach yourself to it and have something relatable to say.”
But at the same time, spending millions of pounds on a single campaign that may or may not resonate with people on an emotional level, while simultaneously closing stores and making people redundant, feels insensitive and difficult to justify. Even if it is the price retailers have to pay to increase their chance of survival in the long-run.