It’s been a challenging few years to be a British retailer or consumer. CPIH inflation hit an annual rate of 7.9% in 2022 and 6.8% in 2023, before falling to just under 3% in the summer of 2024.[1]
Wage growth has outpaced CPI inflation since July 2023,[2] suggesting a partial restoration of consumers’ spending power, but retailers are facing a combination of other pressures that reach far beyond the simple ratio of wage growth versus inflation.
For example, the UK national living wage applied only to over-25s in 2016-21. In 2022-23 this was expanded to include anyone 23 and over, but since April 2024 has applied to anyone over 21.[3]
With the hourly rate rising from £8.72 per hour in 2020, to £10.42 in 2023, £11.44 in 2024 and £12.21 in 2025, employers are facing a climate of paying more to a wider range of workers.
As wage increases, employer national insurance contributions, workplace pension schemes and other fixed costs continue to push up the expense of keeping the doors open and the lights on, retailers need to take a dynamic approach to generating revenues.
For those with physical premises, footfall is as crucial as it has ever been. Figures from the British Retail Consortium show that in the year to November 2024, 36.4% of non-food items were purchased online,[4] meaning nearly two thirds of purchases are still made in physical shops.
This corresponds with the BRC Payments Survey published in early December, which found that the cost of living crisis drove more consumers to shop using cash, and to make smaller but more frequent purchases.[5]
Appealing to bricks-and-mortar shoppers via ‘surprise and delight’ promotions could prove to be a survival strategy for retailers in the wake of the 2024 Budget. So how can you reach out to your customers in this way?
Giving customers a free gift when they make a purchase is one marketing method that we think is overdue to make a comeback. Literally called Gift With Purchase (GWP), it’s a technique that can be used to incentivise a purchase upfront, or to surprise and delight customers unexpectedly.
The gift can be small – a bar of chocolate, a branded tote bag or a pack of stickers can all be widely appreciated – and this is something retailers can offer in-store and as part of home delivery.
Some of the world’s biggest brands were built using GWP marketing. Estee Lauder herself launched her cosmetics brand in 1946 and gave free product samples to shoppers with each purchase, helping to establish the origins of GWP.[6]
More recently, Battersea Power Station launched its summer 2024 season with a shopping event throughout its newly redeveloped mall.[7]
Customers received:
The campaign shows how GWP can work alongside other marketing methods to create a one-off event, or as a long-term way to thank and reward consumers for their custom.
GWP not only builds brand loyalty; ‘try before you buy’ campaigns can also generate sales of new and under-performing products by helping to raise awareness among your engaged customer base.
Another feature of the Battersea Power Station event was the opportunity to personalise any new clothing purchases by adding floral embroidery designs to them, at a dedicated pop-up embroidery station called Botanical Atelier.
This was offered for free, with designs by artist Claire Luxton, whose botanical art installation Field of Dreams was suspended from the Turbine Hall A ceiling throughout the spring.
“Customising reward types wherever possible could be the key to boosting uptake and retention for loyalty programmes,” said YouGov.
In July 2024, a YouGov survey revealed that personalised promotions like special pricing are among the highest-rated by loyalty scheme members. Special discounts and personalised pricing were rated as appealing by 85% of respondents, more than any other benefit.[8]
At MRM we know the value of the personal touch in products, packaging and promotions. Something as simple as adding the customer’s name to a product can create a sense of delight by connecting the physical item with their own sense of personality.
We have all lived through some difficult times due to the economic cycle and the global events that influenced it. Much of that upheaval is ongoing, putting the emphasis on finding fun wherever possible.
Again, a physical free gift or personalised discount coupon can be a way to do this using traditional marketing methods – and a welcome alternative to household bills, if delivered directly through the customer’s letterbox.
Reaching out in this way is vastly underused as a means to surprise and delight customers, and can work well alongside loyalty apps and other digital incentives, so that you do not miss out on engagement from consumers who are not regular app or smartphone users.
Humour can be another effective tool, but be cautious of falling back on ‘magical realism’ or too much cringe in your advertising, as research shows consumers are not fans of either approach.[9]
Instead, YouGov found observational humour to be the best received (82% of Brits), followed by topical comedy (47%) and, surprisingly, jokes about taboo and controversial subjects (40%).
Surreal humour hit the target with just 35% of people, followed by puns (32%), cringey or embarrassing scenarios (30%), impressions (29%), toilet humour (24%) and improv (21%).
Men in general are more likely to find comedy funny; however, it’s useful to note that the overall pattern of what styles of comedy make people laugh was broadly the same for both sexes.
Jokes have been used as a marketing tool for generations. You can find them everywhere from lollipop sticks, to biscuit wrappers, to Christmas crackers.
With this in mind, perhaps it’s time to dust off your joke-writing pen and add a touch of observational comedy to your packaging and promotional messaging in 2025.
Everybody deserves some joy this year, from hard-working retailers right through to your loyal customers. With MRM’s help, you can give them a little treat while generating increased sales and revenues for your business.
To find out more about MRM’s multi-channel promotional marketing services, contact us today or give us a call on 01858 410510.
[1] https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l55o/mm23
[2] https://www.statista.com/statistics/1272447/uk-wage-growth-vs-inflation/
[3] https://www.statista.com/statistics/280501/national-minimum-wage-in-the-uk-18-to-20-years-old/
[4] https://brc.org.uk/news/corporate-affairs/festive-falter-as-sales-slip/
[5] https://brc.org.uk/news/corporate-affairs/cards-may-be-king-but-cash-remains-crucial/
[6] https://www.elcompanies.co.uk/en-gb/who-we-are/our-heritage/our-founder
[7] https://batterseapowerstation.co.uk/news/bps-to-unveil-new-field-of-dreams-artwork-by-claire-luxton/
[8] https://business.yougov.com/content/50083-what-britons-want-out-of-loyalty-programmes-in-2024
References
https://mrm.co.uk/what-is-product-sampling-and-does-it-work/
https://mrm.co.uk/adding-the-personal-touch-to-elevate-engagement/
https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l55o/mm23
https://www.statista.com/statistics/1272447/uk-wage-growth-vs-inflation/
https://www.statista.com/statistics/280501/national-minimum-wage-in-the-uk-18-to-20-years-old/
https://brc.org.uk/news/corporate-affairs/festive-falter-as-sales-slip/
https://brc.org.uk/news/corporate-affairs/cards-may-be-king-but-cash-remains-crucial/
https://business.yougov.com/content/50083-what-britons-want-out-of-loyalty-programmes-in-2024