Target and Toys R Us posted overall sales declines during the holidays.
Stiff retail competition sparks an online-offline chocolate price war.
In the run-up to Easter, U.K.-based supermarket web sites such as Sainsburys.co.uk and Tesco.com, as well as confectioners Thorntons.co.uk and Cadbury.co.uk are competing aggressively to win holiday sales.
E-retailers are flooding their e-commerce sites with discounts, deals and delivery incentives on Easter confectionery: chocolate eggs priced from .75 British pounds each (US$1.19), ‘Buy one get one free’ deals, free Easter eggs for consumers who spend more than 20 pounds (US$31), and free standard delivery for Easter confectionery purchases of more than 50 pounds (US$79).
The economic downturn in Britain has intensified the online-offline Easter confectionery sales war, says Lee McCoy, managing director of Get Visible, a marketing and web site optimization consultancy.
“They're fighting a very fierce battle against each other and for the three months leading up to Easter have been engaging in excessive discounting to attract customers.”
As newspapers report a “bonanza” for the U.K.’s Easter shoppers—with retailers selling up to 90% of their stock of eggs and bunnies at discount prices—those price cuts are being matched online.
“I see a massive uplift in traffic (to Tesco.com) when Tesco advertises,” says McCoy. “They typically start six weeks before Easter—this year they were offering three eggs for the price of two online and offline.”
The snowballing online offers comes “against a backdrop of heavy discounting, and even selling at a loss by the supermarkets,” McCoy says, referring to physical supermarket stores.
While budget-conscious consumers sometimes use online offers to compare prices in physical stores and weigh up deals, many Easter specials are web-only, he adds.
”Cadbury offers online-only gift deals on its Easter hampers, and shoppers can make use of online Easter egg voucher codes, which they can’t do in store. Thorntons ran an almost half-price offer that was only available online,” McCoy says. Easter Hampers in the U.K. are equivalent to Easter baskets in the U.S.
Thorntons has also been peddling m-commerce offers in the run-up to Easter, using the holiday to launch a trial of a new mobile payment technology.
With a smartphone app from Mobile Money Network, consumers can purchase 1p ($.02) Easter eggs from Thorntons’ web site
Consumers register their profiles, including credit card details and their home delivery addresses, then they use the ‘Simply Tap’ app to buy goods and services. To get the Thorntons deal, consumers must first scan a transactional QR code on advertising posters with their phones.
Shoppers can also purchase the promotional eggs using the app’s image recognition technology by taking a photo of the desired product with their phone.
“The aim is to tap into the excitement and impulse of buying chocolate,” says Matt King, head of Thorntons Direct, while developing the m-commerce platform.
Thorntons is doing more than offering great deals to help its business. While focusing on growing its online channel, it’s also shutting poorly performing stores, McCoy says. He says the huge choice and convenience offered online is proving tough on the retailer’s bricks-and-mortar stores this Easter.
Web retailers are putting pressure on physical stores, says McCoy. “You can compare the range of Easter eggs from many chocolate shops in one go and sites such as hotelchocolat.co.uk and Thorntons.co.uk put dietary and size information on their web sites, which makes it easier to do a like-for-like comparison.”
These web sites, says McCoy, also offer low-price Easter gifts with a tailor-made touch. “Online shoppers can get personalized eggs for as low as 50p (US 79cents).”
It is not just heavyweight retailers making an Easter splash online. McCoy says “artisan chocolatiers” across the U.K. are gaining a competitive online edge, by offering specialty Easter gift products to web shoppers, often with postage included.
“You can get some really funky and unusual Easter eggs from online stores that aren’t on the high street,” he says. Among McCoy’s favorites are chili and lemongrass truffles from Scottish Highlands-based company Cocoamountain.co.uk, vegan bunnies from Ethicalsuperstore.com and chocolate Dorset dinosaurs from Chococo.co.uk. High street is a British term for a physical shopping district.
Rachel Parkin, owner of multichannel lifestyle store Reba, says free gift-wrapping and delivery is key to driving business in a tough economy.
Through her web site retailRehab.co.uk, which offers tips and guidance for small, independent web and bricks-and-mortar stores, she encourages retailers to offer free shipping for online Easter purchases. “It can be a great incentive to buy online and aid conversions,” she says.