After last year’s record snowfall put paid to many retailers’ profits, you could forgive shop owners for feeling a tad nervous about the likelihood of a bumper Christmas this year.
Some have spent the best part of this year trying to claw back the revenue they lost out on when weather conditions kept people off of the high street and on their sofas last December. But with Christmas representing 30% or more of a retailer’s business in some cases, it’s not surprising that the industry fears a repeat of the turmoil this time around.
“I am apprehensive about the weather as last year the snow made deliveries challenging and so I have ensured I have back-up delivery companies to use in the event of bad weather,” says Alison Ellerbrook, owner of online retailer Hunkydory Home, which specialises in interior gifts and accessories. “I am spending more on advertising this year and we have a winter gift guide currently being printed to send out with orders to encourage repeat custom.”
While Ellerbrook is taking steps to ensure business is unaffected in the event of any disruptions, she remains positive about Christmas and is forecasting “homely, cosy-style” products, such as hot water bottles, teapots, mugs and cushions, to do well.
For Karen Ebers, buyer at Kent gift retailer Something Special, Christmas is likely to see a sharp increase in sub-£5 gifts and she has been looking out for such products all year.
“I think we are going to do really well with pick-up lines, which people will buy multiple units of, and that is a trend we certainly saw last year,” she remarks. “Home fragrancing, games and puzzles, quizzes and trivia, and things with a purpose — useful gifts rather than frivolous gifts — will do well this Christmas,” she adds.
It is clear that the current environment favours a more conservative approach to business and for many retailers that means careful cost and stock management.
Ellerbrook admits she has so far ordered smaller quantities of stock with a view to replenishing right up until Christmas where possible. She is not the only one to adopt that strategy. Other gift retailers — both in the online and high street segments — admit that the ‘buy little but often’ philosophy best describes the way they are treating Christmas.
Alison Bartram, owner of Heart Gallery, a Yorkshire retailer that specialises in jewellery and prints, has arranged for jewellery, ceramics and wall art from her small independent makers to arrive mid-October and will then supplement that with product from more mainstream suppliers.
“I am staggering orders with my design-led companies to get a steady stream of products arriving from now until mid December,” she says. “Abode Aroma, for instance, has its winter fragrances arriving mid-October so I have placed my initial order with them already so that it arrives promptly and then my top-ups will arrive mid-November and mid-December.”
In Herefordshire, gift retailer Off The Wall only has to place a couple more orders to complete the bulk of its buying ahead of Christmas, while the ordering of specific festive items has only been done in the last few weeks.
“We are lucky in that most of our gift and card suppliers are able to supply Christmas-themed goods until quite close to the end of the year, so we only start to consider Santas, tree decorations and snow-themed gifts from Autumn Fair onwards,” explains owner Ginny Elsmere.
Given the overheads that retailers face today it is understandable that most are keen to offload cost wherever possible. That is certainly the case in the gift industry, where buyers are increasingly looking for wholesalers to carry the burden of stockholding and provide immediate shipping.
Natural Products Worldwide (NPW) is one supplier that has paid particular attention to ensuring it can meet the changing requirements of the retail channel. It works out of two warehousing locations — one in London and the other in Felixstowe — to meet demand.
“We pride ourselves on keeping really good levels of stock, so we are always ready for back orders,” says managing director Michael Sweeney. “That is one of the advantages of working with us — you’re pretty certain to get a really good percentage of your order very quickly. We pride ourselves on timely delivery and being in stock — where possible — in all the lines that are in the catalogue.”
If retailers are more unpredictable in their buying behaviour, though, does this mean wholesalers are in greater danger of being left with unallocated stock once Christmas has passed? Not necessarily, argues Sweeny: “There are always inevitable odds and sods that get left after Christmas, but generally speaking we have clearance avenues for those so it is not a major problem for us, I am glad to say. We don’t do a lot of seasonal stuff either, so we haven’t got loads of Santa stuff sitting on the shelf.”
Although wholesalers and importers generally appear to going to greater lengths to accommodate the wishes of the independents, some retailers believe greater flexibility in terms of order quantities would be particularly helpful during very busy times such as Christmas.
George Irving, owner of The Old Smiddy Gift Shop in Strathaven, reveals that the majority of his Christmas orders were done during Spring Fair, with further additions made at Harrogate Home & Gift in July, but he says some suppliers are hard to do business with.
“We have certainly decided that we are unable to deal with some of the major distributors who still insist on carton quantities,” he explains. “We have dealt with one or two of them for years but have now decided that we can’t commit to 96 or 144 of one item. That just results in tying up too much money in too few lines and ultimately you don’t start to generate much profit until you get to the last third of the carton and by that time you are starting to discount to clear out the remaining pieces. Ordering a little and often and from more suppliers is the strategy we are adopting unless we come across a line which we know is just right for our customers.”
Elsmere at Off The Wall concurs. “We try to order little and often as much as possible, even up to Christmas, but many suppliers have unmanageable carriage-free order levels to facilitate this,” she says. “Print suppliers are worse than gift suppliers in this respect.”
Off The Wall is focusing on making sure it has plenty of good value gifts that cost less than £20, as well as compelling larger ticket items. It has also sourced products that are exclusive to its store or are Hereford-themed, which it expects to appeal to local shoppers. Beyond those, Elsmere cites important sellers as Border Fine Arts, Archipelago, Secret Garden, Yaron Morhaim Jewellery, Hedgerow Jewellery and Time for Design.
Bartam at The Heart Gallery insists her approach to product selection doesn’t really change in the run-up to Christmas although she will pay special attention to the quantity of best sellers she orders and will even double the orders of new lines if she is convinced they will prove popular.
“I have already starting doing that with certain products from Joseph Joseph after watching buying habits over the last three months,” she notes.
Elsewhere, other gift retailers admit they are adjusting their buying behaviour for Christmas, including Hunkydory Home’s Ellerbrook.
“I look at buying more gift items and more lower priced, stocking filler-type items too. I buy smaller quantities of Christmas-specific goods to avoid being left with Christmas stock after December. I start ordering for Christmas in September with a view to Christmas marketing beginning in October,” she says.
