Amongst the many ‘therapies’ I developed in order to keep my trigger happy trading finger less active back in the early days of my FX trading was eBay sniping for bargains. I’d have a hit list of necessary items and once hunted down I’d set alarms and countdown the days and minutes and snipe for the item right at the death, placing the bid with 2-3 seconds to go having already decided what the maximum price I was prepared to pay. As a family the savings for your growing teenagers are not to be sniffed at and as the kids got older they gradually took it upon themselves to bargain hunt and now fully indoctrinated in Dad’s obsession I feel justifiably proud that they refuse to pay ‘top dollar’ for anything. My Daughter is superbly efficient both as retailer and buyer, a great habit that will help curb her expenses through her university days.
I still ‘snipe’ on occasion and still take it personally if I don’t win. Whilst recently shopping for a pair of jeans the price on eBay looked slightly suspicious so I naturally did some..ahem…fundamental research; comparing the item with the bonafide article from reputable bricks and mortar shops, oh yes, I went that deep. It was a pair of Tommy Hilfiger Madison jeans retailing for £80 in Debenhams or John Lewis in the UK. I compared the jeans on their websites and visited the store before bidding £14.99 plus £4 P&P. Bid won with two seconds remaining, a 75% saving on retail. That’s one Xmas present bought early..
Now this article is not extolling the virtues of timing, or fundamental research vis a vis trading, or suggesting that every aspect of your being should be thorough in whatever you do, no, my attention was grabbed this morning with regards to a report that suggested UK based shoppers are becoming highly selective as opposed to impulsive. This also lead me to ponder on the suspicions that the maxim of turnover being vanity and profit being reality still looms large on the high street and any market analysts looking towards the high street for signs of a recovery to the recovery that never was may be searching for some time. Britain is becoming a nation of online bargain-hunters if new figures charting the continued spectacular growth in retail search volumes are anything to go by. We’re no longer a nation of window shoppers, we’re a nation of bargain hunting new media searchers.
Total retail search volumes grew at their fastest rate this year increasing by 35% in the third quarter compared with the same quarter a year earlier, according to the BRC/Google Online Retail Monitor. The increase was driven by a rise in mobile search volumes of 168% year-on-year. The growth of retail search volumes for multi-channel retailers (usually those using stores and the internet) reached 26% in the third quarter of 2011 compared with 71% for pure online retailers. The number of overseas consumers searching for UK retailers grew by 34% in the third quarter of 2011 compared with the same quarter a year earlier. The number of UK consumers searching for overseas retailers grew by 78% in the second quarter of 2011 compared with the same period a year earlier.
Mobile accounted for 10% of retail searches.
Stephen Robertson, British Retail Consortium Director General said:
“Mounting pressures on household budgets may be generating more online retail searches as people work harder to compare prices and track down value. While searches grew 35 per cent, their fastest this year, the BRC’s Retail Sales Monitor show growth in online spending has actually slowed to 10 per cent suggesting extra searches are a symptom of bargain hunting. Even so, online retailing is still expanding quickly compared with selling through stores and searching from mobile devices is showing the most dramatic increase. Retailers are engaging with, and encouraging, this shift in shopping behaviour by providing more and easier ways to search and shop via smartphones and tablets.”
Peter Fitzgerald, Retail Director, Google, said:
“Retail searches on desktop rose by 35% y/y in q3, with mobile growing by 168% y/y. Home and Garden saw strong growth in July, while it was back-to-school searches which fuelled the August increase, with Consumer Electronics in particular seeing phenomenal growth in ‘tablet’ searches. September also saw an uplift, as Christmas gift related searches began to appear. This is unsurprising given that many consumers are Christmas shopping earlier this year, in order to spread the cost and avoid disruption due to bad weather. International searches for UK retailers also saw a massive uplift last quarter, as countries already originating large volumes of searches such as Russia, Pakistan and Mexico saw increases of between 90% and 300% y/y.”
But whilst searches for products has grown exponentially sales and moreover profits have lagged behind as despite the increases in turnover the margins are being crushed. Retailers, whether bricks and mortar, online (or both), have to compete like never before to earn that sale. ASOS the online fashion retailer has reportedly hit the buffers, their latest set of figures begin to suggest that the fizz has finally gone out of fashion retailing. ASOS said stellar sales growth in its home market had ground to a halt, taking its chief executive by surprise and putting pressure on him to speed up overseas growth.
CEO Nick Robertson told Reuters he had underestimated the impact of the economic slowdown on his business, which targets internet-savvy 16 to 34-year-old women looking to emulate the designer looks of celebrities such as Kate Moss, Sienna Miller and Alexa Chung. As data on Wednesday showed Britain’s jobless total hitting a 17-year high, with youth unemployment its highest since records began in 1992. Shares in ASOS, had already lost a third over the past three months, lost another 3 percent on Friday. ASOS on Friday said UK retail sales growth slumped to 1 percent in the second quarter of its financial year from 15 percent in the previous three months to June.
“Even to support this kind of level of growth we are pulling levers that we didn’t think would have to be pulled,” the CEO Nick Robertson said in a telephone interview, pointing to increased promotional and marketing activity and slashing margin and ASOS were not the only retailer struggling to justify their business model recently with Supergroup, owner of the Superdry brand, appearing to have lost some of its lustre.
Supergroup could be a victim of it’s own relatively short success, attempting to sell on all platforms may have indirectly cannibalised their core business. There was a critical flaw in their strategy, they were (and still are) one of the biggest selling bricks and mortar migratory e tailers on the UK’s eBay and as such, given the propensity for folk to shop and compare on line, it was only a matter of time before they were ‘found out’. Selling the same t shirts in store for £19 and £9.99 online with free delivery was never a long term sustainable plan.
Other than the two isolated examples all is not well within the UK and European shopping addiction, the “I shop therefore I am” confirmation of ‘self’ appears to be fading amongst a populace that is shopping to survive as opposed to thrive. Whilst the Apple Fan Boys will still camp out overnight to buy the latest over-priced, over-hyped gadget and according to a recent retail report will go into further debt in order to upgrade, the fizz does appear to have finally evaporated from the retail economy.
The next retail sales figures for the UK could prove to be fascinating, in the meantime I’ve got a pair of Adidas retro trainers to buy for 65% off retail..only a few hours to go..