“The importance of retail’s performance in the coming months can determine a company’s trajectory in a year where the industry has taken some big punches,” says Retail Dive. “The stakes are high.”
Retailers will need to streamline backend operations, boost online and offline experiences, and be more creative about promotions.
“The market is changing so dramatically, that just going back to your playbook and doing what you did last year is unlikely to have the same results.”
~Allen Adamson, co-founder of Metaforce & marketing professor at NYU’s Stern School of Business.
Here are 6 suggestions retailers should consider to have a great holiday season this year.
1) Put promotions under the spotlight
Whether it’s online or at a physical store, people will be searching for deals this season. That’s why it’s super important to draw attention to any savings being offered.
“Promote sales, promote sales, promote sales,” “It’s the number one thing that shoppers look for during the holidays.”
~ Sucharita Kodali, principal analyst of e-business and channel strategy at Forrester.
Some retailers are upping spending money on digital and social media ads. But it’s important to note that price-slashing is starting earlier and lasting longer, essentially conditioning shoppers to wait for those deals before making a purchase. Based on findings from the 2018 holiday season, the best way to compel consumers to engage early is to offer calculated deals that are more targeted.
Last holiday season, Ed Kennedy of e-commerce solutions platform Episerver told Retail Dive, “The strategy of breaking that down in daily deals and certain merchandise categories, merchandising on specific days, is a smart strategy.”
2) Prepare websites for increased traffic
“One of the biggest friction points with Black Friday is online traffic,” says Retail Dive. Although e-commerce has experienced continued growth from Black Friday through Cyber Monday, retailers have discovered that their websites may not be equipped to absorb a dramatic surge in users.
In 2018, the J. Crew website experienced a technical glitch for most of Black Friday (service was on and off in the days following as well) and the Lowe’s site went dark for a while, resulting in many shoppers filling orders at their competitor’s site—The Home Depot.
The challenges associated with keeping websites up and running persist—even beyond the holiday season. In fact, it wasn’t that long ago that Target experienced an outage on its registers, mobile app and website.
“The ability to provide a seamless online experience for an increased user base may determine who has a successful fourth quarter.”
3) Offer a BOPIS service
Last year saw a 47% adoption rate of buy online pick up in-store services—the biggest year on record. According to Ryan Fisher (partner in consumer and retail practice at A.T. Kearney), BOPIS is “one of the key pieces” of the holiday season that “really helped improve service levels across online and in-store.”
Currently, Target and Walmart are the most popular retailers offering BOPIS, indicates Coresight Research. But BOPIS adoption continues to grow as customers increasingly consider it to be a commonplace service.
Retailers like Nordstrom are leveraging BOPIS to drive foot traffic, while Stein Mart now includes the service at all of its stores and Banana Republic and Altheta began offering it as recently as this month.
4) Enhance mobile capabilities
During the 2018 holiday season, mobile capabilities played a crucial role in landing sales, delivering 58.3% of traffic to websites.
The influence of mobile will continue to grow, with the sales of 5G smartphones forecasted to exceed 1 billion users globally by 2025.
While mobile seems to be omnipresent, more than half of retailers are ill-prepared to support emerging mobile technology. Unfortunately, this could result in leaving money on the table. That said, retailers are advised to prioritize mobile payments with the technology services they implement.
5) Gear up for returns
Not surprisingly, returns are an ever present pain point for both margins and logistics, particularly around the holiday season. A projected 77% of consumers plan to return at least a portion of the presents they receive, according to Oracle Retail, and 20% of shoppers are expected to return more than half of their gifts.
FedEx has announced that it will partner with 7,300 Walgreens locations this year for in-store package pickup and drop-off services to streamline the returns process. Michael’s also teamed up with UPS for parcel pickup and drop-off at over 1,100 of its stores.
“Streamlined return services have been a crucial element to how consumers determine whether they will interact with a brand in the future, with 95% of shoppers saying that how smooth the process was influences if they will buy from the retailer again.”
The solution to holding back the wave of returns may be at a point much earlier in the retail process. Retailers should improve product detail pages and ensure that images and descriptions are accurate. “The top reasons that people return things is that products don’t fit or aren’t as depicted,” says Forrester’s Kodali.
6) Stand out by creating a memorable in-store experience
While it’s certain that e-commerce plays an important role in driving holiday sales, in-store shopping remains critical to landing sales. As Shopkick points out, Gen Z still craves brick-and-mortar shopping experiences, with 55% planning to do a majority of their holiday shopping in physical stores.
“Retail has to win in an area that online can’t win, which is to make it more emotional, make it more personal. It still comes out of the basics. When you go to a store, you want to be treated personally. You want them to … do something special just for you.”
Making an experience memorable through personalization will certainly help retailers stand out, suggests Adamson. But retailers need to give customers something special for picking merchandise up in-store—like free gift wrapping. In other words, It’s crucial for retailers to look for ways to differentiate so they stand out from competitors.
With nearly 7,300 store closures so far this year, stakes are high for retailers. A strong holiday season could very likely determine a company’s health in a year of weak business performances.
Retailers must toss aside last years playbook and adopt the 6 recommendations discussed above in order to come up with a stronger game plan that delivers real results.
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