High street retailers fail to connect with changing consumers this Christmas

The majority of high street fashion retailers suffered through a damp Christmas trading period this season as seen with Marks & Spencer, which reported its worst season for fashion sales to date and Next, which revealed a 0.5 percent decline in sales in the run up to the festive day. Whilst many try to blame the changes in weather, data analysis firm Big Data for Human believes that the root of the issue stems from a failure to respond to shifting consumer shopping habits and target potentially 'hidden customers.'

The company, which launched earlier this week, analysed 950 million sales transactions in 2015 for its algorithm and found that many retailers failed to effectively cater their offers to high-value customers, including cross-channel shoppers. According to the data gathered, these 'hidden customers' provided a 5 percent increase in revenue on average, once they were targeted through bespoken marketing campaigns both online and offline.

"What we see from the UK’s disappointing Christmas sales figures is a clear disconnect between retailers’ C-suite executives and their customers, with businesses focusing on products and channels and not the individuals that buy them," commented Peter Ellen, CEO and Co-founder of Big Data for Humans. "A large factor in this is the lack of effective segmentation, that works across online and offline behaviour, based on sales transactions."

"There is also a dearth of readily-available intelligence on what people are buying, how and when. The result is retailers are playing catch-up on customer buying patterns and not even realising some incredibly valuable segments of customers exist. The pulse of the customer could once be gained by "floor-walking". Now it’s about executing on big data across channels. Hidden customer segments can start as a missed sales opportunity, but are often the canary in the coal mine, where problems can lead to a serious retention issue and a dramatic effect on profits."