What is going in retail? The industry is looking increasingly stressed. In the run-in to Christmas I described retail as being in panic mode, and the weeks since have reinforced that view. The body language and behaviour of so many in the industry betrays anxiety and uncertainty.
Black Friday has merely been the most eye-catching discount day during a year that has become progressively price-driven. Online retailers tell me they struggle to meet their revenue targets without running a promotion of some kind – what can they say to their customers if it is not tied to a price offer? Physical stores are not too different. Windows are increasingly plastered with sale offers and 2014 was by the most price-driven year in food and non-food I can ever recall.
An increasing number of retailers are feeling pressured and are less confident about their ability to reach out to customers with a compelling offer without adding the drug of price. And this is a vicious circle because the more you promote the more reluctant are your customers to buy at full price. A growing minority have tangible added value they can communicate through windows, on the sales floor and on websites. Social media and Big Data are positioned as hugely significant. Maybe they are but I mostly see retailers not really knowing what to say to their customers unless it’s about price. It is the message, not the medium, that is key.