Retail Barometer

It was a year that nobody wanted. A virus that swept the globe, forcing government restrictions that included non-essential retailers closing for some two thirds of last year.

But after the shock of last March came resourcefulness, resilience and a ‘I’m not going to be beaten by this!’ resolve, with the majority of gift retailers finding other ways to trade.

Those with a website upped the ante; those without a website quickly set one up; home deliveries became the norm, while click and collect in the second and third lockdowns kept the tills ringing.

In a brutal year for retail - unsurprisingly, almost two thirds of respondents had a worse year overall than in 2019 - there were some ‘ups’ as PG&H’s annual Retail Barometer survey reveals.

Despite the unprecedented circumstances surrounding Christmas 2020, with the sword of Damocles hanging over the heads of retailers as they feared another lockdown leading up to December 25, surprisingly, figures were up on 2019, with 62% of respondents confirming that it was better or the same as Christmas 2019 (compared to 58% in last year’s Barometer findings). For many gift retailers, Christmas started early, with customers anticipating another lockdown and shopping as early as September.

However, it wasn’t a good Christmas for all gift retailers of course - with over a third (38%) saying it was worse (compared to last year’s 31%).

A whopping 81% of those surveyed said that the average festive spend increased significantly, increased slightly or remained the same, (compared to 69% in 2019), with less than a fifth of respondents seeing a decline.

Without being able to see friends and family, people wanted to show loved ones how much they were missing them, with personalised, sentiment gifts among the best sellers.

As expected, sales took a big hit during the lockdowns, down by 70%, revealed the findings.

2019 v 2020 Better 23% Same 13% Worse 64%

PG&H looks back at seven years of Retail Barometer data

Better 37% Same 24% Worse 39%

Better 45% Same 28% Worse 27%

Better 37% Same 21% Worse 42%

Better 56% Same 18% Worse 26%

Better 50% Same 27% Worse 23%

Better 53% Same 24% Worse 23%

The importance of having a website leapt up three places in 2020 compared to 2019, as the lockdowns pushed more gift retailers without a transactional website to create one. In addition, ’shop local’ campaigns took on a new significance, entering the chart for the first time in the No. 2 position. Promotional activity jumped four places as did an upsurge of new customers.

(Last year’s positions shown in brackets) 1 Online/website (4) 2 Shop local campaigns (-) 3 Promotional activity (7) 4 Upsurge of new customers (8) 5 Greeting card expansion (5) 6 Social media (3) 7 Local competition closing down (6) 8 Diversification (2) 9 Staff (1) 10 Shopfit (9) Almost half of respondents also cited offering home deliveries and click and collect; social media initiatives; an increase in tourism and staycations; Google shopping ads and a change in shopping behaviour to Ecommerce.

(Last year’s positions shown in brackets) The UK retail economy 70% (73%) Expansion of gift and home products in supermarkets 50% (27%) Competition from multiples 30% (29%) Suppliers’ websites selling direct to the consumer 26% (-) Charity shops selling Gifts 22% (26%) Lack of trade shows 22% (-) Competitive websites 14% (39%) Expansion of discounters/Deep value retailers 14% (59%) Rent reviews 12% (33%) Parking issues 11% (32%)

Other factors that were detrimental to business included lockdowns, with garden centres and supermarkets open and permitted to sell their whole range.

With supermarkets an essential retailer during the pandemic, (controversially) allowed to sell their whole range – to include gifts and homewares alongside grocery products - it comes as no surprise that the vast majority of respondents (over 90%) viewed them as a threat or a serious threat.

When asked how they viewed garden centre growth in the gift and home sector - given that garden centres were allowed to trade across all product sectors during the lockdowns, opening earlier than non-essential retailers during the first lockdown - almost three quarters of those surveyed (72%) regarded this sector as a threat or serious threat, significantly up on last year’s findings.

A massive 93% of those surveyed see online giant Amazon as the biggest threat of all to independents. Over the past year, without physical shops to buy from, Amazon has been the ‘go to’ for many consumers, as buying habits have shifted to online.

Websites were way out in front as the biggest investment that gift retailers made in 2020, with over half of respondents (56%) confirming that they had taken priority, compared to just over a fifth in 2019.

Sprucing up their shops has been a priority for just over a third of those surveyed (34%). Work has included a full or partial refit, painting the interior and exterior, new branding, new signage, new windows, new doors, improving the ambience and putting planters outside the door. Below: Websites have become a

For the majority of respondents (81%), staffing will remain at the current levels. Only 11% intend to recruit new members of the team.

Three quarters of respondents now have a transactional website. Some 69% of those surveyed concurred that their website is instrumental in driving business in store, where the lion’s share of sales are still made. Over 70% of gift retailers confirmed that they planned to develop their website further in 2021.

For those retailers who do not yet have an online presence, over a third (38%) said that they intended to develop a website over the coming year.

The vast majority of Retail Barometer respondents - 81% - confirmed that they had actively embraced marketing in addition to collaborating with other local retailers/businesses. In store money off/discount promotions were again way out in front, with loyalty cards remaining an important way to encourage increased footfall. Other ways to engage with customers included social media competitions.

Some 93% of respondents are now using social networking sites as a means of promoting their business. Almost all respondents are using Facebook (93%), with over two thirds also using Instagram.

Gift indies continued to give their shops a high profile, with last year’s initiatives including collaborations with other retailers and chambers of commerce to encourage customers to support the high street; creating a Facebook ‘lockdown’ club with live streaming; producing Facebook videos; Mystery bags selling at half price; live QVC style shows; letterbox gifts and gift boxes; loyalty giveaways and Christmas raffles.

('Star' performers have been shown in bold)

Bath and body 47% 33% 20% Children’s clothing/accessories 21% 58% 21% Confectionery/edible gifts 44% 44% 12% Craft products 31% 56% 13% Decorative home accessories 44% 53% 3% Fashion accessories (eg scarves) 27% 58% 15% Furniture 19% 50% 31%

Gift stationery/journals 27% 50% 23%

Giftwrap 27% 41% 32%

Impulse items 19% 52% 29% Jewellery 23% 46% 31% Pet-related gifts 33% 50% 16% Plush 30% 40% 30% Seasonal gifts 28% 37% 34% Tableware/kitchen gifts 10% 58% 32% Toys & Games 17% 56% 26% Women’s fashions 9% 57% 33%

Some 57% of respondents introduced new product in response to the pandemic. These included face masks; hand sanitiser; gift boxes and hampers; jigsaws and puzzles; letterbox gifts; sentiment giftware; lockdown humour greeting cards; beauty and wellbeing items; hair accessories and confectionery/sweet treats.

Home accessories, along with eco products, were the top two sectors that respondents wanted to expand this year, with greeting cards in third place. Driven by the pandemic, garden gift products and pet-related giftware also made it into the top 5. Other products included ‘ready to go’ and bespoke gift boxes.

The most popular way those surveyed source products is at trade shows (76%), with sourcing from a rep or agent a close second. Other key sourcing avenues include reading trade magazines such as Progressive Gifts & Home, researching on the internet and looking at what other shops are selling. Almost a third of respondents intend to increase they number of suppliers they buy from this year, with just over half (52%) happy to remain with their current companies.

Sourcing sustainable giftware is a priority, with all respondents confirming that they looked to source sustainable, environmentally friendly products in 2020.

(Last year's figures are shown in brackets) Town centre retailing groups 53% (47%) Federation of Small Businesses 30% (35%) Chamber of Commerce 23% (19%) Charities 23% (58%) Schools 10% (28%)

Respondents confirmed that their stand out products in 2019 were (in alphabetical order): Jellycat; Rosie Made A Thing and Wrendale Designs.

A whopping 83% of respondents confirmed that they are influenced by whether or not a product is made in Britain. (See pages 27-29).

Other concerns included further lockdowns; online becoming the way people choose to shop; unavailability and/or difficulty in getting stock; price hikes due to Brexit; rents not reflecting difficult trading conditions; big garden centres offering heavily discounted products; suppliers selling direct to consumers online.

'Challenging', ‘struggling’ and ’worrying’ once again remained the most commonly used words to describe the gift industry in 2020. However, on the upside, respondents also praised gift retail for being ‘resilient’, ‘progressive’ and ‘exciting’.