The biggest Q4 on record?
Insight and reflections on a Q4 like no other from Beth Nunnington, Ed Blakeway and Chris Gorney.
Q4 was an interesting one this year. For those brands that benefit from Christmas gifting, we saw demand kick up a couple of weeks earlier than normal in mid-September (making it a Q4 and a bit).
We predicted that demand would keep on growing to give many their biggest Black Friday ever, and that it would continue all the way until Christmas, which also proved to be the case.
With demand so high, many of the brands that were able to maintain solid supply chains and operations saw impressive, and in some cases record-breaking, performance.
A couple of well-known high street fashion brands we work with told us that they did more revenue through their websites in 2020 than they did through both their stores and websites in 2019.
The lockdown effect
Brands that benefited from the lockdown effect, predominantly those in home retail and the subscription space, had a stellar 2020. The question coming into Q4 was would it carry on? Would this finally slow as people prioritised Christmas gifting?
This turned out not to be the case. In most cases, Q4 was the biggest quarter of a very big year for these businesses.
A big season for Etsy
There was a huge movement across social channels to support small businesses and as a result Etsy searches increased significantly in Q4. When you compare search volume over the past 5 years, the first few days of December was evidently the most popular period the website has ever had.
Naturally, we also saw a shift towards those searching locally. Whilst city centre high streets are sadly struggling, smaller businesses based further out, within communities and built up residential areas are potentially doing better. Take this example, whilst people were doing a lot of baking during the first lockdown, in Q4 we saw a shift towards people preferring to go out and support their local bakery instead.
In addition, alcohol sales continued to increase. Searches for ‘wine delivery’ increased by a staggering 520% YoY in November 2020, leading to record Q4 performance for our client in this market.
Swapping black dresses for comfy loungewear
From a fashion perspective, whilst online sales continued to boom for many of our clients, the usual popular items for the festive season saw significant drops. For example, in November searches volume for ‘black dresses’ dropped by over half (55%) as Christmas parties were cancelled across the country and pubs and restaurants unfortunately had to close across many cities. We saw demand for ‘loungewear’ take its place, with a 234% increase in searches, YoY during the same month.
Start-ups, the ethical choice & the elephant in the room
2020 also saw a huge spike in new boutiques, side-projects and start-ups. In Q3 Shopify reported YoY growth of 96%, and whilst Q4 results haven’t been released yet it’s highly likely that even more people decided to fulfil their dream of starting their own business.
Generally, behaviour towards gifting and buying is shifting with a much heavier focus on ethical purchases. Even charities have thrived in the pandemic (Oxfam had their best festive period in 8 years!).
Last but not least, the elephant in the room — Amazon. Amazon has thrived over Q4 and will continue to do so given the range of products and its operational prowess. Its customer service function may leave a lot to be desired, but it appears to be an unstoppable force when it comes to retail. Dominating top spots across thousands of searches and now rolling out grocery deliveries with regional partnerships it appears there is very little Amazon can’t do.
As the COVID-19 pandemic continues, it will be interesting to see how 2021 pans out for all sectors.