With just five weeks until what will be a very different Christmas this year, this Clear Digital Digest examines:

• The impact of the second lockdown on retail and online sales.
• The increasingly spread out nature of Black Friday – plus the potential implications of massively increased online sales on deliveries; Santa will be a busy boy this year.
• Christmas advertising is in full swing with ITV now forecasting an increase in revenue over this period so we take a look at this, plus a favourite campaign of the last week: Sony’s PlayStation 5.
• And finally: a novel approach to strategic planning. 

LOCKDOWN 2.0

Although not the cheeriest subject, this is the first Clear Digital Digest since we went into a second lockdown on 5th November.  

BLACK FRIDAY: ONE WEEK TO GO

As well as the lockdown, online sales in November will be further boosted to some degree by Black Friday next week.  

DELIVERY: SANTA WILL BE INCREASINGLY BUSY THIS YEAR

One topic that we will likely hear more about in the coming weeks is the problems caused by these inflated online sales when it comes to actually delivering the orders.

CHRISTMAS ADVERTISING

Of course, to many it wouldn’t feel like Christmas without the high prestige TV led campaigns we are now accustomed to expect, which have really increased in profile over the last week with the launch of both the John Lewis ad plus a new series of ITV ratings winner “I’m A Celebrity Get Me Out Of Here”.

• Despite the general downturn in advertising this Christmas for obvious Covid related reasons, ITV are actually expecting revenues for the last 3 months of 2020 to beat those recorded last year.
• We highlighted last month that overall ad revenue for Q4 this year was forecast to decline by 10.5%/£724m – but within that TV was estimated to fall by only 2.7% year on year, compared to the likes of cinema (-66%) and outdoor (-20%).
• With regards to the TV ads themselves, this has undoubtedly been the most challenging year for both ad agencies and brand owners to strike the right tone creatively.  That said, I can’t help but feel somewhat underwhelmed by all the large retail campaigns I’ve seen so far, with no clear stand-outs.  That may be unfair as perhaps I’m just a little jaded by the increasing hysteria from certain quarters about the need to have a “normal Christmas” this year (spoiler alert: it won’t be).  In any case, this year’s effectiveness research will no doubt be intriguing for brand owners as it comes in.
• After a slightly negative note there, I’ll highlight an excellent (and cheeky) campaign by Sony to promote this week’s launch of their new PS5 console, where they have replaced the traditional London Underground roundels outside Oxford Circus tube station with the iconic four shapes that have featured on all PlayStation controllers.

AND FINALLY…

As alluded to above, forecasting accurately for 2021 is going to pose more challenges than for any year in living memory.  So I liked this take on strategic planning from Tom Fishburne, the ever entertaining Marketoonist…

Today’s varied Clear Digital Digest round-up includes:

• The launch of major Christmas campaigns is imminent, but it is predicted that advertising spend will be down 10% this year.
• An update on the latest ecommerce sales figures, plus Black Friday getting earlier every year.
• The latest in customer channel shift from brands as diverse as TikTok, Shopify, Royal Mail, AO, Sky and John Lewis.
• And finally...the great Woolworths hoax.

HERE COMES CHRISTMAS: BUT AD SPEND FORECAST TO BE £724M LESS THAN LAST YEAR

With half term coming to a close this week and Christmas products all over the high street, November is typically when the large retail brand campaigns come to life, with large TV spend supported by a variety of other media.  Of course 2020 is not a typical year, so there will certainly be all kinds of challenges creatively this year, as well as with regards to available budgets.

• The Advertising Association (AA) and Warc forecast final quarter spend will be £724m less than last year, a decline of 10.5% on last year to a total of £6.2bn.  This would be the biggest drop in the “golden quarter” since figures started to be compiled in 1982.
• Marks & Spencer are a prime example of a retailer that will likely be drastically changing its advertising strategy this Christmas, with rumours that its TV advertising will be purely focused on food this year, with clothing only supported online.
• TV is actually forecast to be fairly resilient this Christmas, with a decline of just 2.7% on last year.  Instead - and very understandably – it is external sectors such as cinema and outdoor/posters that will be seeing especially significant declines.

• Digital spend across search and online display is also forecast to fall in the fourth quarter, by almost £300m to £3.57bn in total.  However, this still equates to a dominant 57% share of the total ad spend of £6.2bn.

 

• Of course, ad spend shifts this year vary greatly by product category, as is shown by some recent eMarketer research demonstrating that the travel and automative sectors have been hit particularly badly.
• Looking at just digital advertising in the UK, it is forecast that travel spend will decline by 37% this year, as the table below shows.  Other sectors have been less adversely affected by the pandemic, led by technology products as we spend more time at home for both leisure and work reasons.

ECOMMERCE: SALES UPDATE - AND BLACK FRIDAY IS GETTING EARLIER EVERY YEAR

Despite all this year’s uncertainty, one trend that can be confidently predicted for Christmas 2020 is that ecommerce sales will take a significant larger share of total retail sales, but how much larger exactly?

• The ONS released their latest online sales tracker on Friday, showing that ecommerce accounted for 26.1% of all retail sales in September, up 8% on the 18.1% recorded in September 2019. 
• This 26.1% was a slight decline of 0.6% on the previous month August’s 26.7%, but the pandemic driven medium term shift to increased online shopping remains.
• Overall retail sales for September grew by 3.4% on September 2019 and edged forward by 1.5% month on month.

CHANNEL SHIFT: SHOPIFY, TIK TOK, ROYAL MAIL, AO, SKY, JOHN LEWIS

Here are a few recent stories that caught my eye regarding channel purchasing shifts, including developments from AO and Sky which demonstrate how digital first brands continue to consider the ways that a physical presence can help them engage further with customers…

AND FINALLY…

​One brand that won’t be returning to the high street – despite a flurry of excitement earlier this week – is the old childhood favourite Woolworths.  

One of the most talked about developments for both ecommerce and general retail in recent years has been the rise of “Direct To Consumer” (DTC), whereby brands are bypassing traditional retail outlets/websites and selling direct to customers.

2020’s unfortunate events have led to a well documented large increase in home deliveries, including DTC brands generating record sales across sectors as diverse as food kits, mattresses and sportswear.

The rise in marketplace sites (especially Amazon and eBay) has certainly played a part in increasing DTC sales, and Clear Digital recently explored this in the deep dive “The UK marketplace sector – and the role of community”.   However, DTC websites are also rapidly expanding, particularly on the Shopify ecommerce platform.

This blog explores further the size and dynamics of the UK DTC sector, as well as examining Shopify (and similar ecommerce solutions) in order to understand more about DTC winners and their growth drivers, including expanding onto other channels...

• We can split Direct To Consumer operators into 3 distinct categories: subscription box services, DTC pure and DTC hybrid.

 

• Subscription box revenue was estimated by Royal Mail at £700m in 2017 and is likely to surpass the £1bn mark this year.  Such services are especially popular with a younger and more urban demographic.
• Male grooming has been forecast as the largest growing subscription category to 2022, and some originally DTC only brands such as Harrys are now available through more traditional outlets such as Boots and Sainsburys.

Today’s Clear Digital Digest is full of tasty morsels, as we look at:

• “Bagel cities” – and how customer footfall continues to cluster at the edges.
• The latest online grocery news, particularly from Ocado.
• Notable digital dates: happy birthday Instagram and here comes Amazon Prime Day.
• A different type of Hotel Chocolat.

LONDON: A BAGEL CITY, NOT JUST FOR BRICK LANE

​Javelin Group have recently published some insightful research regarding the impact of Covid19 on footfall within 5 key global cities: New York, Sydney, Tokyo, Berlin and London. 

• The graph below looks at footfall within a variety of different London shopping destinations: e.g. central, suburban, transport etc. 
• This shows how the suburban Wood Green shopping centre has nearly recovered in terms of customers visting since Covid struck but it is a very different story for the office workers starved Cheapside as well as the prestige shopping destination of Regent Street.  

AND FINALLY…

After coming across this tweet, it appears that yes you can book a chocolate orange themed room in a ski hotel in the Alps.  The Christmas tree in the picture really is something.

Today’s Clear Digital Digest looks at some recent stories regarding Pret A Manger and Amazon, reviews today’s new ONS retail data and learns how the data revolution is transforming the world of cricket.

• Pret A Manger’s new subscription service
• How Amazon’s ads service is driving its profits
• Hot off the press: today’s ONS retail sales update for August
• And finally…the cricket data revolution

AMAZON’S PROFITABILITY: INCREASINGLY DRIVEN BY ITS ADVERTISING

​Well worth a read is this fascinating article about Amazon and its profitability, courtesy of Ben Evans.

• The article firstly challenges the initially previously received wisdom that “Amazon doesn’t make a profit”, perhaps true in years gone by, but profits jumped especially in 2018 and 2019, reaching $22bn last year.
• More recently, the conversation has shifted a little to state “ah but all the profits come from AWS” – ie Amazon Web Services, Amazon’s highly successful cloud computing service.  Again, while this may historically have been true, the case is made that it’s now Amazon’s ad services that are really gaining in profitability, having grown hugely in revenue over the last 5 years as the graph below shows…

RELEASED TODAY: ONS RETAIL SALES UPDATE FOR AUGUST

The Office for National Statistics (ONS) have today released their latest retail sales figures for August.  We reviewed July’s data in a Digital Digest last month, so here’s a quick update, one month on…

• Overall retail sales increased slightly in August, up 0.7% against the previous month, but more pertinently, up 1.7% on the previous year (August 2019).
• Internet sales accounted for 26.6% of all retail sales in August, the second full month since all physical stores were able to trade.  This share fell back slightly from the 28% recorded in July, but is still significantly higher than the 18.1% recorded in August 2019.  
• With the current volatility surrounding Covid, it is difficult to make any predictions about how much of this shift to online shopping will remain in the medium/long term, but it is certainly interesting to continue tracking this share.

AND FINALLY...

When my subscription copy dropped through my letterbox this week, I was surprised to see The Cricketer magazine (now in its centenary year) highlighting “The Data Decade” on its front page. 

​With the relevant articles exploring how increasing use of digitised data has fundamentally changed recent cricket coverage and some future predictions on how this may evolve, it’s a timely reminder than even such a traditional pastime as cricket is experiencing unprecedented change with its own digital/data revolution. 
But this also demonstrates that there is still a place for more traditional media…yes I do still read some print magazines as well…