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…

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 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…

​It’s now been 5 months since we entered lockdown and then slowly started to re-emerge as restrictions began to ease, bit by bit.  It would be trite to say the world has changed in a way previously unrecognisable to all of us; of course it has and constantly so.  In fact the pace of change makes it increasingly difficult to keep up, especially with a seemingly never-ending deluge of data and information and data being provided. 
Looking at these awful events from an ecommerce perspective, I’ve highlighted 5 key trends from these last 5 months to help understand the seismic shifts we’ve been experiencing with regards to how customers have been shopping during this unique period:
​

1. Online sales have accounted for as much as a third of total retail sales during lockdown
2. Ecommerce drove £658m of additional grocery sales just last month
3. Such dynamic growth is speeding up sector innovation
4. Spending is very squeezed in other sectors, especially clothing and for mid-market brands
5. As well as ecommerce innovation, other new channels are being introduced, such as product rental

This Clear Digital Digest takes a look at each of these trends in turn, as well as providing some retro gaming light relief at the end…

1. ONLINE SALES HAVE ACCOUNTED FOR AS MUCH AS A THIRD OF TOTAL RETAIL SALES DURING LOCKDOWN 

​This insightful chart from the Office for National Statistics (ONS) shows the huge growth in ecommerce sales during lockdown, with internet sales peaking at 32.8% of all retail sales in May.  

​2. ECOMMERCE DROVE £658M OF ADDITIONAL GROCERY SALES JUST LAST MONTH

• Of course the grocery sector has been trading throughout lockdown and so really helps to emphasise the shift towards online shopping, as recent Nielsen stats show…

• Nielsen UK’s latest data shows that in the 4 weeks to August 8 online grocery sales rose by 117%, achieving a record market share of 14%, which they have described as “the most dramatic change of shopping behaviour we’ve ever seen”.

• UK shoppers spent £678 million more on FMCG products during the month, but online sales growth of £658m accounted for a massive 97 per cent of this increase.
• In store sales in comparison rose just 0.3 per cent compared to last year, representing spending growth of £20 million. 

3.  SUCH DYNAMIC ECOMMERE GROWTH IS SPEEDING UP SECTOR INNOVATION

This step change in customer behaviour is seeing a never faster pace of innovation within the market, with recent developments including:

• Amazon has recently announced plans to expand its Amazon Fresh food offering nationwide in the UK, a move long expected by the established grocery giants.  An add-on to its Prime/delivery membership currently available in London and surrounding areas, Amazon has promised wider availability for the service by the end of 2020, including in major cities such as Birmingham, Manchester and Edinburgh.

AND FINALLY…
As an 80s kid that loved arcade gaming and a 90s student who used part of his student loan to buy a Sega Mega Drive, before then becoming involved professionally as a PS2/Xbox buyer in the 00s, I really enjoyed watching the new Netflix video games history docuseries “High Score” - well the first two episodes I have thus far encountered anyway…

Hi and welcome to the first Clear Digital Digest for a while, as the Clear Digital blog returns.  More about that here but as before, these summaries will select a range of recent interesting, insightful and sometimes quirky ecommerce, marketing and media stories and break them down into handily digestible form. 
​
​Today we’re looking at some new research on the world’s largest brands, the increasingly polarised nature of the UK retail market plus a novel way to socially distance ahead of lockdown restrictions further easing this weekend…

RETAIL’S CONTINUING DIVIDE
It’s been another unfortunately contrasting week of winners and losers in the retail space.
​ 

• Sainsburys announced bumper sales growth of 8.5% for the quarter ending 27th June.  This was boosted by a huge (but not unexpected) 87% growth in online orders, which grew to 650,000 per week, up from 370,000 the year before.
• Sainsburys’ grocery business overall grew by 10.5% in the quarter, with general merchandise sales growing by 7.2%, boosted by a 78% rise in Argos home delivery sales.
• Kantar have had a busy week, also publishing some data for the grocery market covering a similar period, showing how online growth continues apace.  Food ecommerce sales grew by 91% from mid May to mid June, a figure that would have been even higher had delivery capacity existed to meet the unprecedented demand.
• And as we’ve all no doubt experienced, it’s not just the supermarket giants benefitting, but also smaller convenience stores and corner shops.  Sales at independent retailers have grown by 69% in the last 3 months.

AND FINALLY…

As Clear Digital returns this week, I’ve just published two deeper dives as well, both examining the marketplace sector.  This is an area that has actually benefitted to some degree from the present turmoil, with recent stories including Etsy doubling its sales in April and music marketplace Discogs seeing usage levels increase by 65%.

1. The UK marketplace sector – and the role of community.   The UK marketplace sector is responsible for a third of all ecommerce sales - and 2020's unfortunate events have seen a large rise in sales and sellers.  This blog examines the sector's size, dynamics and the increasing success of community-driven marketplaces.
2. Discogs – the digital success story of the vinyl revival.  Discogs is a digital brand with a difference; it’s thriving in the hugely competitive music sector, by catering to a niche but dedicated sector of music enthusiasts and record collectors.   This blog reviews the current music market as a whole, delves deeper into the second hand vinyl market and then examines Discogs’ offering and recent success.

 
And finally, with (some) pubs set to reopen this weekend – and mixed views as to what this will bring – I did like this novel solution from across the Channel that I discovered on Twitter this week…