December is traditionally hailed as the most important month of the year for retail, with shoppers digging deep into their pockets to make their gift purchases.
Consequently the pressure to make sales within this few-week period can be intense, causing retailers to dedicate their efforts to discounts, promotions and other measures to improve sales. Although December remains an essential month for selling, some new statistics unveiled by GfK market analyst Leanne Whittaker have revealed the significance of November for pre-Christmas sales, particularly online.
Speaking at a seminar during the London Watch Show, Whittaker, an account manager at GfK, which specialises in research on the UK watch market and well as global watch markets, said that November is extremely important for selling watches online, compared to high street sales.
In 2012, in terms of online sales for the year, 16.6% of the total watch sales were made during November, compared to high street sales where November was only worth approximately 9% of the year’s value.
“While obviously December is still the most important month for both online and high street, these results highlight that november is a lot more key on the internet,” explains Whittaker.
She adds: “I think it is due to people being a bit more organised and a bit more cautious, worrying about getting things in time for Christmas or returning things. I think the snow we’ve had in recent years has made people think about it in terms of planning their Christmas shopping.”
Whittaker describes a certain type of shopper who is prepared for the festive season, taking time out, ahead of the last minute Christmas shopping rush, to go online in November, do their research and generally be more organised. “Therefore, we see this uplift on the internet and it becomes more key,” says Whittaker. “Obviously this is helped by the fact it’s so much easier for people to shop online in terms of easy access, knowledge and devices and all this has just made November a more important month.”
The revelation of the opportunity for strong online sales in November will come as good news to watch retailers, giving them chance to widen the Christmas selling window. “December on the high street must bring quite a lot of pressure for retailers,” observes Whittaker. “If something like the heavy snow of recent years does happen there’s a risk of losing quite a lot of sales in that three week period. If retailers can, in some way, encourage people to purchase online in November and target that more organised and planned shopper to make their watch gift purchase in November they could potentially be minimising the risks involved of just being totally reliant on the December high street.”
Interesting to note in relation to high street Christmas retail too were observations relating to the split between average prices for ladies’ and men’s watches. GfK data shows that although the average price of men’s watches drops quite significantly in December, it is still double that of the average price of ladies’. Meanwhile, despite being lower overall than the price of men’s watches in December, the ladies’ average watch price in December on the high street was shown to remain very consistent. “We don’t seem the same decline in average price that we do for the gent’s side of the market,” says Whittaker.
Although the data does not show specifically who is making the product purchase, Whittaker says that a similar pattern occurs each year and ties in with with fact that, at that time of year in the run up to Christmas, the purchase of a ladies’ product tends to be as a gifted item. Whittaker suggests that because the watch is being bought in the final weeks before Christmas and in some cases is perhaps more of a last minute, impulse gift purchase it is not as price sensitive because the purchase needs to be made.
Whittaker deduces: “So actually there is actually really no point in discounting ladies’ watches at Christmas because those people making the purchase will buy that product whatever the price. They’re not as price sensitive at that time. However, the gent’s watch average price still drops because generally speaking at Christmas when gift buying, people do buy a cheaper product than when they’re self purchasing during the rest of the year. Gift buyers do their research and find good deals and generally, we tend to spend less on a gift than if saving up our earnings to splash out on ourselves. There are also probably a few better deals to be had around the gifting time.”
Meanwhile of note, in November the average price for a men’s watch on the internet in 2012 was £91, which was significantly higher than the average price of the ladies, which was £67 on the internet. “That’s why it is important to encourage people to shop online in November,” says Whittaker. “I’m not necessarily saying discount because I don’t think that’s necessary to keep getting people to buy products but I’m talking about some sort of promotional activity or marketing or something to draw people to shop online at that time.”
While December still remains an essential month for watch retailers both online and on the high street, online’s growing market share of sales has created new selling opportunities for the festive period, with web purchase patters widening the window for Christmas selling. While price drops may not be the answers retailers could benefit from recognising the significance of November online and reconsidering promotional activity for an extended Christmas count-down. .
This article originally appeared in the August 2013 issue of WatchPro.
To read a digital version of the magazine in full online, click here.