liz claydon quote web

As the big retailers launch their Christmas ads, it is easy to get lost in the heartwarming tales and the portrayals of the exciting parties we will all apparently be going to! However, the purpose of these ads is to deliver sales.

The Christmas period is critical for retailers, with the final golden quarter of the year accounting for nearly a third of annual sales. In fact, John Lewis reportedly claimed its much-anticipated advert provides the biggest return on investment of any of its marketing and is crucial to short-term profit. The key for grocers will be to maintain this sort of momentum - this year more than ever, with margin headwinds attacking from all sides.

It is interesting to note the differing strategies of the Christmas campaigns. The discounters are following the well-trodden path by producing emotive story-based adverts. Meanwhile, Tesco and Asda have decided to focus on more realistic ‘Christmas moments’, like where to seat Aunt Mildred. It will be interesting to see if this is a winning strategy in the war for market share.

While boosting sales in this critical trading period may be the number one priority, these campaigns are also contributing to long-term brand building and customer engagement. Certainly John Lewis is seeing this year’s bouncing dog as a way to engage with customers. The ad is backed by a virtual reality in-store experience and a customised Snapchat filter which, after the launch, will appear when in a partnership shop.

Similarly, as diverse as everyone’s Christmas traditions, so too will be the way in which customers choose to interact with the marketing efforts of retailers and suppliers. With Christmas shoppers seeking out thoughtful gift ideas, personalisation at this time of year seems natural. However, in the quest to differentiate and capture consumer spend, grocers must not over-step the fine line between exclusivity and creepiness.

Whether the critics and the public warm to this year’s Christmas tales or not, the companies behind them should remember that, while Christmas is crucial, the ongoing relationship with their shoppers is even more important - and more difficult to get right.

Liz Claydon is KPMG’s head of consumer insights

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