As the snow and bad weather continues to engulf large parts of the UK, research by the insurance group RSA estimates that the UK economy is losing up to £500m per day.
Whilst the vast majority of this loss will be as a result of up to a third of the UK’s workforce being unable to get into work, the UK high street will be anxious, hoping that the 30cm of snow which is hitting large parts of the country doesn’t cripple an already sluggish retail market.
The weather could not have come at a worse time. The economy is currently growing at about 1% and if we see a similar contraction of the UK economy due to snow as in 2010, where the Office for National Statistics estimated the UK economy contracted by -0.5% in the fourth quarter, then this may be enough to put some firms out of businesses.
However, even in these conditions there will be winners.
As we are forced to endure time indoors with the family, the TV becomes the centre of attention. Last Saturday night (19th January), viewers of the long running BBC1 series Casualty were up +6% week-on-week, Take Me Out on ITV1 saw a +3% increase and The Jonathon Ross Show saw an impressive +14% increase week-on-week.
Even ITV1’s celebrity diving competition Splash, which hit the airways with mix reviews at the start of the year, saw an impressive +2% rise in viewers, having experienced a -7% fall during the previous week.
But it’s the high street that we are most worried about and not celebrities belly flopping from a 10 metre high diving board – though funny as it is.
Year-after-year, the Christmas period highlights the importance of having an online retail strategy.
Morrisons suffered in this year’s supermarket wars as it’s like-for-like sales for the 6 weeks to December 30th fell by -2.5%. Dalton Philips, chief executive of Morrsions said the performance was “disappointing” and that the “major headwinds” for Morrisons are its lack of presence in the fast-growing online and convenience store markets.
With more and more consumers turning to online due to convenience and often cheaper prices, adverse weather events like those we are currently experiencing make it an even more attractive retail platform.
And our online shopping occasions are evolving, occupying a wider window than in previous years. No longer are we constrained by traditional retailing hours – we are now liberated to shop where we want, when we want; be that via a computer, tablet or smartphone.
A recent report by Econsultancy found that nearly a quarter (24%) of UK consumers used a mobile device for Christmas shopping this year. According to their online Christmas 2012 Online Shopping Survey of 1,000 respondents, 11% of UK respondents used a smartphone and 13% used a tablet, compared to 77% who shopped using a desktop.
This growth in m-commerce is and will continue to have severe implications for the high street. The growing importance of m-commerce over the Christmas period was further highlighted in data from IBM where it found that online sales on Boxing Day 2012 increased by almost 45% compared to 2011.
So the moral of this story is: if the consumer cannot get to you, then you must get to the consumer.