It may be seven weeks until Christmas but with John Lewis due to launch its latest tear-jerker next week, the unofficial start of the annual festive battle for the hearts and minds – and, ultimately, wallets – of the British public is about to commence in earnest.
Companies – led by the big name retailers and supermarkets – will spend a record £5.6bn this year in a frenzied attempt to outdo each other. But does the lavish brand-building and product-pushing translate into higher festive sales?
John Lewis is expected to launch a £7m ad campaign on 10 November, with sources tipping Randy Crawford’s song One Day I’ll Fly Away as the soundtrack.
The retailer makes 20% of annual sales and 40% of its profits over the Christmas quarter and capturing the nation’s hearts is absolutely critical.
“Failing to engage the nation would have a significant commercial, social and cultural impact on the John Lewis brand,” says its ad agencies in a detailed analysis of its Christmas ads.
“We make just over £8 [profit] for every pound we spend so the Christmas ad campaigns are hugely profitable,” says Craig Inglis, customer director and marketing chief at John Lewis. “The returns are long term as well; we see the continuing impact. The £7m we spend is dwarfed by our competitors. We punch well above our weight.”
John Lewis says its Christmas ad campaigns over the past four years, which have included two star-crossed snowmen, a bear and a hare, Monty the penguin, and an elderly man on the moon, have fuelled an average 16% lift in festive sales. The number of festive shoppers in John Lewis stores has climbed more than 50% from 926,000 to 1.4m between 2013 and 2015.
John Lewis’s ads may grab the most headlines but it is not the only major player to have used advertising to turn Christmas into a commercial cracker.
From its big budget and controversial ad highlighting the spirit of the Christmas Day truce in the first world war trenches, to last year’s revival of Judith Kerr’s loveable calamitous cat Mog which spawned a best-selling childrens book, Sainsbury’s is the only retailer to have come close to John Lewis in recent years.
This year’s Sainsbury’s ad, which will launch on 14 November, will showcase another “interesting creative collaboration”, following tie-ups with the British Legion and Kerr’s Mog.
The Mog campaign, which trumped John Lewis’s Monty the Penguin as the most-viewed ad on YouTube UK in 2015, helped the supermarket beat analyst expectations for sales over the Christmas period, although they still fell by 0.4%.
Craig Mawdsley, joint chief strategy officer at Sainsbury’s ad agency AMV BBDO, says research has shown that the supermarket managed a profit of £24 for every £1 spent on its Christmas ad campaign in 2014. The figure was even stronger last year.
“Classic [advertising] of just products, and big prices and headlines actually generates much lower return on investment than a beautiful 3.5 minute film with a cat in it,” Mawdsley says. “That’s largely because it has a broader brand effect. Product advertising alone is short term and doesn’t help the long-term perception of the brand.”
Sainsbury’s spent almost £22m on advertising over Christmas last year, part of its battle to see off discount supermarkets such as Aldi and Lidl.
Aldi and Lidl spent £23m each on marketing last Christmas, with only Tesco and Asda higher among the supermarket brands in 2015. Lidl used its festive advertising to push the public to reappraise it as a quality brand.
Currys/PC World hit the jackpot with a major shift away from its usual product promotion strategy and hiring American actor Jeff Goldblum. Pushing its brand not its products for the first time boosted festive sales by 5%, above analyst expectations.
Other success stories include House Of Fraser, which has once again gone for the “anti-John Lewis” strategy – punchy soundtrack and in-your-face dancing. Last year’s attitude-laden “Your Christmas, Your Rules”, which used Justin Bieber’s choreographer, has been followed up with the newly launched “Christmas is Coming to Get You” featuring Ready or Not, famously covered by the Fugees, sung by Laura Mvula.
House of Fraser hope its counter-strategy will work again this year –sales over Christmas 2015 rose 5.2% and the store notched up its biggest ever online shopping day.
“It’s tough out there, the Brexit vote revealed a nation not in a good place,” says Jonathan Trimble, chief executive of House of Fraser’s ad agency 18 Feet & Rising. “We have taken advantage of people being a little angrier out there. John Lewis has done a Richard Curtis [director of Love Actually and Four Weddings and A Funeral] to Christmas ads. That’s not relevant to everyone.”
But for every Christmas cracker there are a few turkeys. Last year’s big budget effort by M&S, once a Christmas high-flyer who spends well over £23m a year, was little more than a glitzy product ad using the beyond-saturated Uptown Funk by Mark Ronson and Bruno Mars. Its Christmas sales fell 5.8%.
So too Morrisons, which last year dumped its traditional celebrity tie-up with Ant ’n’ Dec, in favour of a back-to-basics approach featuring its own staff.
A flurry of campaigns with totally divergent strategies have already hit the screens, from early runner Burberry’s mini-film featuring Sienna Miller and Domhnall Gleeson, and Harvey Nichol’s tongue-in-cheek “Britalia” campaign celebrating all things Italian, to Argos’s £30,000-a-pop ice skating Yetis.
“People at Christmas want to be engaged in stories,” says Craig Inglis, who despite John Lewis’s recent success takes nothing for granted this year. “Not everyone can do a John Lewis ad. We have to keep the thread [of ads] and also keep it fresh. No one here is resting on their laurels. We don’t believe the hype.”
