There’s nothing like a little pressure to drive prioritization. In retail, that driver is called Holiday.
What’s different about this holiday season is the state of retail in general. A day doesn’t go by without headlines about Retail Apocalypse, abrupt change, store closings, chapter 11 filings and mobile consumers with endless options. NRF reports that consumers plan to shop more online than in stores this holiday for the first time ever.
But it’s not doomsday – not even close. Just about everyone is predicting the best shopping season in over a decade. Store closures and slowing brick-and-mortar sales don’t mean that shoppers aren’t buying. They’re just buying differently.
Holiday 2017 will be the perfect case study to help merchants prioritize focus in the new era of retail. With droves of consumers shopping via digital and brick-and-mortar, this compact 2-month window will shine a telling light on what’s needed 365 days a year.
1. Shoppers are mobile-first. Retailers should be too.
Mobile shopping will continue to grow despite how frustrating it remains for shoppers. More than half of mobile shoppers are dissatisfied because retail mobile sites and apps fall short with ease of use, personalization and checkout. Retailers still largely see mobile as ecommerce’s little sister, with many still treating it as a special IT project.
During 2016, mobile surpassed desktop with 51.3% of digital traffic worldwide. And while mobile traffic will surely increase this holiday season, traffic does not equal a sale. Mobile sales represent about 34% of ecommerce sales. Imagine the possibilities if retailers switched to thinking mobile-first.
To seize mobile sales opportunities, retailers must;
2. Stores will offer inspiration and convenience.
Digital is the growth mechanism going forward, but that doesn’t mean a zero-sum game for stores. Digital can breathe new life into dated store models as retailers right-size.
Traditional department stores have acquired too much space and debt over the years. Online options have decreased foot traffic. Most shoppers now see massive stores stocked with floors of inventory as inefficient and overwhelming.
Department stores place 5th out of 8 on the list of where consumers plan to shop.
While showpiece destination stores in premier markets won’t go away, retailers can right-size chains, store footprints, inventory, and operations in an age when digital can reach the masses for a fraction of the cost.
This holiday season and year-round, stores should aim to deliver inspiration and convenience that digital alone cannot - with human interactions, experience-led purchasing, and immediate gratification. Hiring should shift from restocking shelves to associates fulfilling digital orders for pickup, personal service assistance, and parlaying returns from online and offline in to new purchases with personalized cross sells and upsell suggestions. Target, Nordstrom and Kohl's are three retail brands that are innovating for the holiday season.
Shoppers love the digital-store link. Many “pre-shop” using their mobile device to guide them through the store, buy online and pick up in the store. This dynamic has become a popular bridge between digital and physical. Focus on how to make stores smarter. Arm associates with tablets that provide AI-powered suggestions, line-busting no wait checkout, and endless aisle options to order out of stock items and ship orders directly to shoppers' homes. Streamline inventory based on online and offline transaction data.
3. The slow death of the Big Sale.
Infinite online options have killed the once-reliable driver of traffic and spending - the Big Sale. The appeal of the sale has worn off with constant retailer emails, rotating banners, promo codes and even snail mail promotions leaving consumers asking, “Isn’t there always a sale?”
Black Friday is no exception. Consumers love instant gratification and aren’t waiting for products to go on sale if they can get it on a competitor’s site for less today – one of the reasons why millennials don’t buy on Black Friday.
Forbes and JLL cite that the majority of shoppers start buying outside of the big sales:
While Black Friday and Cyber Monday results are expected to grow this year, guaranteed deals and fast shipping have taken the wind out of the Big Sale’s sails.
Retailers should rethink how they do sales promotion. Provide different levels of savings, exclusive promotions, and sneak peeks in stores to VIP Loyalty members. Instead of batch and blast emails with %-off promo codes to the customer base, use AI-powered recommendations to scale personalized suggestions for “products especially for you” on sale (or not) to the house list year-round.
Even if this season’s Holiday is a success, 2017 was a turbulent year for many retailers. Come January, retailers should examine what worked and what didn’t to drive practices year-round. Scrutinize how shoppers browsed and purchased, what tasks they did in store vs. online, and the effectiveness of promotions. Elicit feedback from your holiday shoppers to guide 2018 direction.
One thing will remain constant: shopper behavior will continue to change, so be ready to experiment and move fast!