And where is the money?

«And where is the money?" this is exactly the question that many retailers were asking themselves at the end of last year, expecting a traditional New Year's Eve rise in sales. But alas, in general, November and December 2017 did not bring the long-awaited results and a significant increase in revenue, and some retailers even announced a decrease in customer flow and, as a result, sales.

January and February are traditionally considered not the best months for fashion retail, unlike, for example, the entertainment industry, which is in high demand during the holidays. Winter 2018 was no exception to this rule: retailers lured super-discounts to stores and sold collections at the lowest prices. Should we expect a surge in sales this spring?

It has already become customary for everyone to blame sanctions, the crisis and a decline in purchasing power for the decline in sales. But is this really the case? After all, the volume of sales is formed from such indicators as the size of the average receipt and the number of buyers.

With the first one, everything is clear: the average buyer has become more picky and economical. And where did the buyers go? Let's try to find out from Mikhail Vasiliev, head of Research and consulting, Data Consulting Department at Watcom group, which develops systems for counting visitors in retail.

Mikhail, how does the seasonality factor affect the behavior of buyers this year? Are there any special features? For example, there is a feeling that at the end of 2017, too active marketing and advertising campaigns dedicated to "Black Friday", in fact, discouraged buyers from buying something for the whole month. Was there, according to your data, a surge in attendance at the end of November and a "failure" in the first three weeks of December?

Indeed, according to the indicators of the Moscow local market, in the week following Black Friday, November 17, the level of the Shopping Index showed a decrease (4%). At the same time, in the following weeks, indicators of the activity of potential consumers gave a monotonous growth, which continued until the New Year. The seasonality factor has affected here: New Year's Eve weeks (as a rule, the whole of December) are marked by increased activity of visitors to shopping centers and retail facilities.

At the same time, comparing 2017 and 2016, it can be noted that if, according to the results of the period of 1–47 weeks of 2017 (that is, from the beginning of the year to the week of Black Friday), the level of the Shopping Index was 7% lower than the level of this indicator for the same period of 2016, then in the period after Black Friday (48–52 weeks of the year) the gap has significantly decreased, amounting to less than 2%. At the end of the year, the activity indicators of potential consumers increased significantly, which, in addition to the traditional seasonality, was facilitated by deferred demand and an active marketing policy of market participants.

– According to your weekly reports, it is clear that in different weeks and months some areas in which the shopping malls of Moscow and St. Petersburg are located were more visited, some less. Are there patterns here and how can they be explained? Is there a dynamic by year? For example, do you see that some direction (say, north) is beginning to show less effectiveness?

It should be noted that local markets and the Moscow market in particular, as a rule, have a well-pronounced seasonality in the activity of potential consumers, which can be traced in the presence of traditional peaks and fluctuations in certain ranges of values depending on the time of year, the schedule of holidays and pre-holidays, etc.

So, in most cases, the lowest level of consumer activity can be traced in the summer period - this is the period of mass vacations, as well as during long weekends (May holidays, New Year holidays, etc.).

The highest rates are observed in the pre-holiday weeks before February 23 and March 8, as well as in the week at the end of August and the beginning of September (the start of the academic and business season) and several New Year's Eve weeks.

At the same time, it is important to note that different formats of shopping centers can behave differentially in the same time periods. For example, on weekends, pre-holidays, holidays, the indicators of large-format objects show significantly greater growth, accumulating additional flows of visitors. Small objects are generally more resistant to seasonal fluctuations in activity, their attendance is relatively stable. In summer, there is a decrease in the activity of potential consumers in retail facilities located in residential and business areas, due to the influence of factors related to seasonal vacations, etc. In the effective management of the facility, it is necessary to understand these nuances.

– How would you describe the current state of retail as analysts? Is there a feeling that online commerce is replacing traditional formats?

– Of course, we can talk about the growth of the share of online commerce. And, quite naturally, with a relatively stable capacity and the total volume of demand in the consumer market, any of its new components, if it grows, takes some share from the traditionally existing formats. Another question is how critical it is at the moment. I would say that at the current stage of market development, e-commerce does not directly threaten the sustainable development of traditional formats, but rather acts as their complement, including due to the competition factor necessary for the normal evolution of high-quality development and improvement of sales channels and services in the interests of the end consumer.

To be continued.

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