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3.5bn Christmas retail sales expected to involve smartphones

Retail sales purchased on or influenced by smartphones will reach £3.5 billion this Christmas, according to research revealed today.

Business advisory firm Deloitte has predicted that some £330 million of sales will be made directly through smartphones this festive season with a further £500 million in sales coming through tablets.

Meanwhile, it is anticipated that approximately £3.2 billion of in-store sales this Yuletide will be influenced by smartphones as cash-conscious consumers use their devices to research prices and discuss products prior to purchase with friends and family via social media.

“As with recent years, the strongest growth will be found online, with purchases completed on mobile phones double or even triple that of last year,” explained Deloitte’s Head of Multichannel Retail Colin Jeffrey.

“The rapid adoption of tablets and the high number received as gifts this Christmas will drive a sharp increase in transactions through these devices.

“However, whilst transaction growth is slower for smartphones, their broader influence is far greater.

“Whilst we forecast 10 per cent of in-store sales will be influenced by smartphones in December, by 2016 we predict this figure will be as high as 18 per cent for the full year, equivalent to £43 billion of sales.

“We are also beginning to see the power of social commerce with more and more consumers using Twitter and Facebook to share reviews, offers and product information. Retailers are also starting to use social media as a forecasting tool, monitoring buzz around certain products to predict demand.”

However, while increased spend is set to strengthen the burgeoning e-commerce sector, overall retail sales are forecast to suffer over the period.

Christmas retail sales are expected to edge up just one per cent in total this year and, although this puts sales in positive territory, Ian Geddes, UK Head of Retail at Deloitte, warned that this equates to a fall in volume once inflation of 2.5 per cent is taken into account.

Geddes added: “We remain cautious on the long-term outlook for UK retail, but there are more reasons to be optimistic than pessimistic this Christmas.

“Consumer confidence has gradually improved over the course of the year and despite the recent increase in inflation, it is much lower than it was 12 months ago easing the pressure on households.

“Whilst it is not certain whether this will translate into higher spending, with consumers continuing to show a desire to save, we believe it will be enough to generate modest growth.

“Yet with retailers increasing their focus on stock control we would expect to see better use of strategic, targeted sale activity as opposed to the blanket application of discounts across stores seen in recent years.

“As food prices continue to increase, we would expect general merchandise to be flat at best and very possibly experience a slight fall as consumers decide to save the Christmas dinner.

“However, this hides a more complex story. Increasingly, we are seeing examples of certain retailers performing strongly and others weakly within the same sector.

“Shoppers are responding to those retailers that combine the right products with exceptional customer service across all channels, dynamic and exciting online and mobile sites and a brand that they want to be associated with and invest in.”

Source : Gemma Taylor – Retail Gazette

26 November 2012
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