Why are retailers seeing an increase in footfall?

Posted by Maria Murphy Oct 24, 2013 11:57:00 AM

Topics: retail, property, social media marketing, Ipsos,, Economy,, retail statistics, UK,


New statistics indicate that the UK retail sector has seen something of a rebound in recent months. But what's driving this trend and how can retailers capitalise on this newfound optimism?

Facts and Figures

The latest figures from Ipsos reveal that in the retail sector, footfall in non-food stores has risen by 8.5% in the third quarter of 2013. This is in comparison to the previous quarter, which was significantly better than the five-year seasonal average rise of 5.8%. 

In addition, the gap in footfall levels since 2012 also continued to close, with the number of shoppers over the quarter down only 5% year-on-year, which was a marked improvement on the comparisons in both Q2 and Q1, when they stood at -6.1% and -5.3% respectively.

Although the statistics provide further evidence that the consumer economy has improved in this period, Ipsos said the strength of the quarter would have been stronger still if September’s figures had been better. So why is it that September in particular had a bad trading month and why are we now starting to see the market slowly pick up?

What's Driving the Pick-Up?

In September, the Retail Traffic Index was weaker than it had been over the previous few months with retail footfall dropping by 6.8% on August and by 6.1% on September last year.

“Despite the stumble in September, the trend over quarter three indicates that the retail sector is on the mend,” explained Dr Tim Denison, director of retail intelligence at Ipsos Retail Performance.

“People’s appetite for shopping is returning as their confidence grows and the economy gradually improves. The strengthening housing market, the rising number of mortgage approvals and the Government’s Help to Buy scheme all generate an impetus that is particularly welcome news to home-owning consumers and DIY/homeware retailers alike." 

The Ipsos figures show that the quiet bank holiday week got September off to a slow start, with many people choosing to savour the final rays of a summer sunshine over going shopping. Even the notable product launches of the i-Phone 5S and Grand Theft Auto V failed to lift the overall footfall levels sufficiently to match last year’s.

Across the regions, it was found that there was less of a North/South divide in September than in previous months. This reflected the importance of the end of the holiday season and back-to-school campaigns.

Here's what Ipsos found in terms of footfall change between September 2013 and September 2012: 

  • Scotland & Northern Ireland -5.1%
  • North of England -7.0%
  • The Midlands -8.5%
  • South West England & Wales -6.6%
  • South East England & London -3.9%
  • Footfall change: September 2013 vs August 2013
  • Scotland & Northern Ireland -7.6%
  • North of England -2.2%
  • The Midlands -2.8%
  • South West England & Wales -11.9%
  • South East England & London -10.3%

So what are the reasons for the third quarter rise in consumer footfall?

The 2013 GfK NOP survey figures showed consumer confidence has reached its highest level since 2009 - from -33 in 2011 to -10 in September 2013, suggesting that the British public's mood has climbed slightly from 2012. Additionally, a poll of 1000 people by Beaufort showed that 12% of adults felt more confident about spending money on non-essential items than they did six months previously.

It has been suggested that this confidence has been prompted by the public’s expectations that the UK’s economy will pick up over the next twelve months. A YouGov poll, commissioned by The Times, said 26% of people were happy with the state of the economy in July, almost twice as many as June’s 14%. However, trends like this rarely exist in a vacuum and consumers' optimism may have also been bolstered by the media’s wide coverage on the economic upturn.

Retailers are putting their faith in consumer confidence, as shown by John Lewis, which is opening its first pop-up shop in Islington, North London. The shop is to specifically promote its housewares and furniture lines in the run up to Christmas. This move also came after department stores, along with home-wares and furniture retailers, showed the strongest figures in the BDO sales tracker in recent weeks.

Another aspect that can be credited with driving consumer spending and tempting customers into shops is the increase in retailers’ use of social media platforms. £3bn of retail sales are predicted to be influenced by social media in the next year. Petra Jung, of eBay UK, says they "believe that the real value from social media will come from the way it is used to influence and inspire purchases".

Retailers have also seen success by posting promotions - offering discount vouchers or incentives via social media, which encourage customers to go in store. It wouldn't be hyperbole to therefore credit social media as a contributing factor in helping to drive the recent footfall increase.

The third quarter increase, combined with a general feeling of optimism and confidence from consumers, has given the retail sector a positive forecast for the approach to Christmas 2013. And fingers crossed the outlook will be similarly positive heading in to 2014.

Your Turn

So what’s your take on the current retail footfall figures? Are UK retailers heading for a successful couple of months and are we looking at an explosive Christmas on the high street? As a retailer have you made a shift towards using social media to increase or build loyalty and confidence in your brand?

Why not leave us a comment? We're always interested in what you have to say. And if you're looking for advice on using social media marketing to increase footfall and sales for your brand then why not get in touch today?

We've also put together a brand new guide for SMEs looking to get to grips with using social media as a marketing tool, so be sure to hit the button below and download it for free today:

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