Retailers have high hopes for Christmas spending this year with the percentage of retailers expecting more than 5% growth, nearly doubling since last year. This suggests that while retail spending will likely be lower in 2020, many retailers are seeing supercharged demand for their products as consumers spend more time at home with the share of wallet for retailers shifting accordingly.

However, Deloitte’s ninth annual Retailers’ Christmas Survey 2020, reveals signs of sales polarisation and despite the optimism for some, showed a two-speed retail highway, with a number of retailers in the fast lane and others seemingly stuck in first.

According to Deloitte Retail Group director, David White, this year’s survey reflects the uneven impact of the pandemic on Australian retailers. “Some have benefited from border closures and consumers spending more time at home, whereas others in the services, apparel and catered food have borne the brunt of the downturn,” he said.

“The polarisation of the market means that there is not just one narrative around Covid-19 but many.

 In contrast, while a larger proportion of retailers expect margin declines of greater than 2% in 2020 than in 2019 (19% versus 11%), the main margin expectations are relatively consistent to last year. Some respondents were highlighting that stock availability is an issue this Christmas, but margins may hold up even if sales disappoint.”

If there is one certainty this holiday season it is that digital channels will be critical to success. White said some retailers may have been caught flat footed at the beginning of the pandemic, but with stores closed, they needed to move quickly.

“The proportion of respondents expecting over 10% of their total sales to be online this Christmas is 44%, the highest in the history of our survey and 71% expect online sales to exceed last year. Retailers are already looking to November events such as Black Friday and Cyber Monday to drive online sales ahead of Christmas,” he said.

Many retailers have successfully used click and collect shopping options during Covid-19 to minimise contact between staff and customers with E-commerce exploding over the past six months.

Retailers are also investing in technologies that enable ETA track and trace, dynamic routing, autonomous delivery and pick-up / drop-off networks, with 32% of respondents highlighting digital and omni-channel capabilities as their most important focus to increase sales. Last mile delivery capabilities will be a key priority for e-Commerce this Christmas and beyond.

While the shift to online and digital has accelerated due to the pandemic, in-store remains the priority destination for 73% of respondents. Over 68% of retailers identified ‘digital and omni’ and ‘customer engagement and experience’ as strategic priorities in the weeks leading up to Christmas.

Commenting on the survey results, Australian Retailers Association CEO, Paul Zahra said it reinforced trends seen across the year, with clear winners and losers within particular retail categories. “We can see the effects of the government stimulus across spending trends and retail performance leaving us in no doubt that stimulus works for retail. Online shopping including click and collect is the fastest growing channel for retailers,” he said.