‘Tis the season for till bells to ring! Now that Black Friday is out of the way, the Christmas shopping season has begun in earnest. And, if predictions come true, it could be a bumper year for consumer spending.
How much will consumers spend in the run-up to Christmas 2015?
Mintel predicts UK retail sales are forecast to grow 2.5% to £42 billion, showing shopper demand is holding up well. However, behind the joyous headlines there are a couple of important factors to consider.
Firstly, Black Friday activity showed a heavy slant towards online spending – and Mintel predicts that 4 in 5 consumers will turn to a website for their Christmas purchases. This increases the challenge for bricks-and-mortar stores, encouraging customers away from the comfort of their sofa.
Secondly, intense market competition is driving down retail prices, meaning businesses will potentially have to sell more stock to surpass last year’s profit levels.
For retailers of all sizes, the key to increasing sales conversions this Christmas is to capture as many potential customers as possible. And it’s something larger corporations are doing more successfully than many smaller retail businesses at present.
How can small businesses keep up with larger rivals this Christmas?
One of the key reasons that bigger retailers are leading the way is that major chain stores have been pioneering contactless payments throughout the year, to the point where they are now an instinctive part of the customer experience.
Contactless is the UK’s fastest-growing payment method. 74.5 million cards have now been issued to British shoppers, with the number of contactless transactions increasing by 220%, compared with this time last year. The rise of this payment method is enabling retail businesses to speed up proceedings at the checkout, and process more customers per minute.
However, contactless card terminals are not as widely used by small businesses – and this may be down to the myth that they’re expensive to implement.
As with any new technology, there’s often some cost involved in switching over, but many terminals simply require a software update which is usually included in your Payment services agreement contract. Any expenses associated with contactless payments are quickly recouped by the bottom line benefits of adding ‘tap to pay’ technology.
At Christmas time, when stores are at their busiest, contactless card terminals enable SMEs to process transactions faster – critical to beating the queues that lead to customers walking out empty handed.
Not only that, but offering contactless payments adds yet another level of convenience for shoppers. Whereas previously, shoppers may have been restricted to the cash in their pocket when it comes to their in-store spending budget, contactless gives them another way to pay for low-value transactions.
This has the added benefit of enabling customers to buy more; there’s no need to count loose change at the checkout in order to decide whether to make an impulse purchase.
Of course, many forward-thinking small businesses are already offering contactless payments – and Christmas is an ideal time to encourage its usage. At peak periods when more than one member of staff is on duty, SMEs could offer an ‘express till’ for contactless customers. Even if small businesses only have one card payment terminal all year round, it’s a relatively inexpensive exercise to add an extra card machine just for the festive period.
Ultimately, converting the most customer opportunities this Christmas will rely on providing a quick, smooth experience for shoppers. Small retailers already know they need to fight hard to wrestle business from bigger rivals; there’s no reason why they shouldn’t have the technology to fight that battle on a level playing field.