The retail industry has experienced unprecedented volatility over the last eight months, traditional retail planning has been thrown out the window as many retailers are so busy managing day-to-day sales and treading water to stay afloat.
Retailers need to act now to be ready for the upcoming season to maximise the sales opportunity and recoup the revenue deficit from the last 6-8 months. The time is short but it is not too late to get your business ready to pivot and implement the strategies that will help you to succeed this year and will set you up for sustainable future success.
How will the 2020 season be different?
The new normal is well and truly embedded into our every day now and this will continue into the holiday shopping season and beyond. Some of the biggest changes we can expect include:
A significant portion of sales will be online. While the online shopping trend was already on the rise, 2020 will deliver more than just a steady increase, the growth will be exponential, and your ecommerce ecosystems and infrastructure will be pushed to its limits.
FOMO will drive an early start to the season. Buyers have already experienced delivery delays in their online shopping over this last period. “FOMO” will drive a significant number of online shoppers^ (78%) to start earlier and the majority of those (83%) have indicated they will be starting in early November.
Consumers will do more bargain hunting and comparison shopping. A key reason that shoppers are going to be increasing their online spend^ is to take advantage of bargains. In terms of the discount thresholds that you want to consider, 36% is the average discount required to trigger an immediate purchase. What's also important to understand^, 50% of online shoppers will purchase at a 25% discount and additional discounting above 50% achieves minimal additional sales.
Agility will be critical to compete effectively this holiday season. The brands that will win holiday 2020 will be highly agile — able to adjust their marketing messages and business processes quickly so that they can be first to react to changing circumstances around everything from inventory levels to customer demands to external forces.
How you can prepare for success this holiday season
The last point above around agility is an important one; even though agility is about being able to react quickly and pivot as needed, it still requires robust planning. With that in mind, how can you prepare for a successful 2020 holiday shopping season?
1. Ensure you have the right systems and technology – it is not too late to put in place the right system that will ensure you can maximise sales during this holiday period and set your business up for future growth. Choose a partner who can deliver a rapid implementation service and has expert support to ensure your staff are trained and onboarded in time.
2. Optimise your inventory holdings – you need to ensure you have the perfect balance of stock to cater for demand. Too little will risk lost sales and too much will risk having your cashflow tied up with excess stock that will lead to clearance selling. Having the right POS software system will enable you to plan and optimise the perfect balance of inventory investment for the duration of the season.
3. Deliver an omnichannel customer experience – the reality is that we live in an omnichannel world where consumers expect to be able to bounce seamlessly between different channels and have the same experience. They want to research and find available products online (and see “live stock in store”) and be able to immediately pick up from a nearby physical store (“instant click & collect”). Your gift vouchers and special offers also need to be omnichannel for both purchase and redemption.
4. Prepare for an agile marketing program – be ready to have a large range of discounted inventory available from early November and pre-promote offers for special online events like Click Frenzy 10th November, Black Friday 27th November, and Cyber Monday 30th November. Be prepared to be able to react to the situation on the ground at a moment’s notice.
5. Dial up your customer service both instore and online – while there might be less people crowded into shopping malls this year, those who are shopping instore will be there with intent to purchase. Ensure your POS system makes the capturing of customer data easy and seamless for your staff so you can build a database that you can grow into loyal customers in 2021.
6. Make customer acquisition your primary goal - online sales will enable the collection of data that will power new customer growth programs in the new year. While there will be less people crowded into shopping malls, those who are shopping instore will be there with intent to purchase. Ensure your POS system makes the capturing of customer data easy and seamless for your staff so you can build a database for ongoing personalisation, loyalty programs and marketing to drive repeat sales. A customer is for life, not just for Christmas.
7. Carefully plan your rosters and brief/upskill staff – customer service has become the main driver of retail sales and brand loyalty in a post-COVID retail world. Make sure your people are engaged, well trained, knowledgeable, loyal, and motivated. The unprecedented nature of this year is sure to produce a holiday season that is unlike any other. If you are looking for ideas or to learn how other retailers are preparing for this holiday season our team of retail experts are always happy to chat and share what we are seeing across the thousands of retailers that we partner with.
^ Data Source: Power Retail Trajectory Report, September 2020