How do bank holidays affect the e-retail world?
In order to be successful in the fickle and fast-moving world of e-commerce, businesses must be prepared for every peak and trough. Bank holidays are particularly interesting times as they can present both. In order to capitalise on the opportunities they create, while simultaneously avoiding the obstacles they present, retailers must be properly prepared.
Get it wrong and you'll be powerlessly watching your competitors edge ahead; get it right and the rewards are plentiful.
Spending fluctuations
Brits now spend more than £100 billion online every year, and the figure is growing constantly. Each time the stats are compiled, though, the charts and graphs show a similar pattern, with noticeable spending spikes around the bank holiday periods.
The two spring holidays are particularly popular shopping times, as figures from e-commerce solutions provider Venda prove. According to the company's research, UK consumers spent an extra £1.60 per transaction on Easter Monday last year - an increase of three per cent on the average.
One of the biggest bank holiday spikes in recent memory occurred in 2011, when online sales rose by 20 per cent during the additional bank holiday for the royal wedding weekend.
The wider impact
Interestingly, the bank holiday effect isn't restricted to the day itself. The Easter surge mentioned above actually extended to the Tuesday of that week, with everyone's high spirits seemingly carrying over. This may have also been impacted by the uncharacteristically nice weather.
Consumer spending habits also change in the build-up to a bank holiday, if research from eBay is anything to go by. The focus is on certain types of goods, though. The internet auction giant reported that transactions involving sporting goods grew by 16 per cent in the two weeks prior to Easter 2014, with DIY sales increasing by 10 per cent.
Certain types of goods will sell well
The fact that this growth is focused on certain product categories is hardly surprising. Many people use bank holidays to get things done around the house, or to enjoy leisure activities for which they wouldn't normally have the time. The increases noted by eBay are simply a sign of consumers preparing for their time off.
This is true for all standard bank holidays, as research from Amazon proves. The company reported growth of 73 per cent in sales of sledgehammers in the week leading up to the late May bank holiday in 2014, with sales of welding equipment increasing by 74 per cent. Adding to this, plastering tool sales were up 37 per cent and chainsaw sales up 19 per cent.
It's important to note that the weather has the power to impact all of this. If the forecast is looking poor, gardening equipment sales are unlikely to rise, for example.
The delivery dilemma
Thanks to the internet, consumers now have the power to shop whenever they want, whether that's over lunch, at work or in bed at two in the morning. Historically, the downside of this approach has been waiting at home for items to arrive, but retailers these days are working hard to meet changing needs by introducing 24-hour deliveries and extending their hours to include Saturdays - and sometimes even Sundays.
The evolution hasn't quite made its way to public and bank holidays yet, though, as many delivery firms choose these periods to close temporarily and catch their breath. While very few consumers will expect to receive their orders on a bank holiday, retailers should make every effort to keep customers informed of their delivery hours to avoid disappointment.
It's also worth publishing 'last orders' information. This should include the final date and time at which shoppers can order and still expect to receive their items before the bank holiday. Of course, this is normally done around Christmas for obvious reasons, but it could also be effective throughout the rest of the year, especially for people buying the gardening and leisure gear in time to use them on the break.
Capitalising on bank holiday opportunities
Any time of the year when consumers have more time to shop should be seen as an opportunity for retailers. Make the right moves and the rewards could be significant.
It's a great idea to focus your marketing efforts on the products that are likely to sell well. Easter is an obvious one; gifts (chocolate and otherwise) are big business at this time of the year, as well as the obligatory DIY bits we've already touched on. The latter is also true in May and August, so start building promotional campaigns well in advance to get shoppers in the right mood.
You'll then need to account for fluctuations in sales by adjusting stock levels in preparation. If it's available, use sales data from previous years to determine exactly how much adjustment will be necessary.
Last but not least, use the opportunity to connect with your customers! Reach out, wish them well for the long weekend or simply provide some vouchers to celebrate what is a highlight of the working calendar for so many consumers.
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