How retailers are shifting strategy for the 2020 holiday season
CX Best PracticeseCommerce
This holiday retail season promises to be starkly different from years prior. Where e-commerce may have played second fiddle to brick-and-mortar shopping in the past, 2020’s most successful retailers will be those that elevate their online presence.
According to data from Think With Google, nearly 75% of U.S. shoppers who plan to shop this holiday season said they will shop more online than in previous years. Experts are predicting that online sales may grow 25–30% this year, accounting for nearly 17% of total retail sales.
In the pre-COVID era, annual shopping days, such as Black Friday and Boxing Day, drew hordes of people to stores and malls. Today, these types of singular sales events are unrealistic. "Black Friday is over," said one NBC article; projecting weeks of sales will take their place.
"I think that will translate to less emphasis on the specific holiday promotion days like 'Black Friday' or 'Cyber Monday' and more of a 24/7 holiday feel," says Barbara Kahn, a marketing professor at UPenn's Wharton School.
This new approach to holiday shopping comes at an already difficult time for brick-and-mortar retailers, many of whom were already struggling to compete with online-only businesses in a year marked by downsizing, closures, and bankruptcies.
As the “new normal” continues to evolve consumer behavior, driving us increasingly online, how can brands best prepare themselves for additional web traffic, increases in customer inquiries on digital channels and greater demand on fulfillment and returns centers?
Beyond the buy online, pick up in store model
A major business outcome of the pandemic is that many retailers will become digital-first enterprises. They may not abandon brick-and-mortar locations, but they will develop new strategies to become less reliant on their stores for revenue. E-commerce will become the starting point, not an afterthought, and storefronts will be more focused on becoming brand-building experiences.
Kahn points to the 2008 recession as a great example of how brands rethought their approach to engage consumers while remaining financially viable. "We saw enormous creativity in retail: Rent the Runway, The RealReal [luxury consignment service] and the rise of digital native vertical brands like Warby Parker and Casper," she says. There is room for innovation way beyond traditional e-commerce, curbside/in-store pickup and expanded click-and-collect shopping. "What will be different this year?" wonders Kahn. "More digital events, more gaming, more outdoor spectaculars? How can we amp the fun holiday shopping spirit? What will replace visiting Santa at the mall?"
More personal, less crowded shopping experiences — used to enforce physical distancing, but that also help create a sense of exclusivity — could become the new norm. Some retailers have already used by-appointment selling very effectively, shares Doug Stephens, a retail futurist and the CEO of Retail Prophet. Brands use this tactic to provide a superior level of service to key customers. On top of that, says Stephens, "two things have been seen to happen: customers that book an appointment are demonstrating high purchase intent, and average order sizes also tend to be larger."
Adopting more sophisticated tech
COVID-19 may have accelerated the shift to digital, but the need was already there. The expansion of next- and same-day delivery options in the e-commerce realm have really challenged the benefit of instant gratification previously only achievable in an in-store setting. Kahn says that's why there is such a major push to resolve supply chain and logistical issues. Predictive, cloud-based inventory systems with visibility to both retailers and suppliers is one way to do it.
Location-based services, meanwhile, can help brands retarget customers with abandoned online carts while they're doing in-store shopping. A brand can use their mobile app to engage customers, whether in their own store or in third-party stores that carry their products, to offer personalized campaigns and capture customer attention during the limited time they do spend there.
Adjusting support operations with workforce management
Although retailers have been extending the holiday shopping season for decades now, big brands like Gap Inc. are still bringing on as many as 65,000 seasonal workers for retail stores, call centers and distribution centers. With that kind of volume, small improvements to workforce management (WFM) can make a huge impact.
Without a WFM system, it would be impossible to accurately forecast exactly how many additional workers are required at different times. While workforce management can be accomplished through spreadsheets and traditional timesheets, it truly comes down to a matter of having the ability to quickly and accurately scale. A WFM platform can help create schedules for thousands of employees and predict adherence to them, and paired with advanced data analytics, employers can create short- and long-term forecasts by both channel and contact type.
Overstaffing and understaffing can each create big problems for contact centers, either by wasting unnecessary money or creating longer customer hold times. But when coupled with AI-powered chatbots to assist with better routing customer requests and answering simple queries, everyone wins. The customer gets quick, efficient support; the customer service agent spends less time responding to repetitive requests, and the company preserves its bottom line in a tough retail environment.
Blending digital and in-person experiences for the holidays
Despite the shift to e-commerce, some brands are finding innovative ways to unlock value from their brick-and-mortar locations. For example, Amazon formed a partnership with Kohl's so that customers can return their Amazon purchases to Kohl's locations.
It's certainly a strategic choice. Overall, more holiday e-commerce shopping will likely mean more returns. The Amazon/Kohl's partnership is a smart response to that reality, says Kahn — as long as it generates more purchases. "That's why better CX and more efficient systems can help reduce those losses," she says.
The mysteries shrouding how this holiday season's shopping trends will unfold likely won’t be completely revealed until we're well into 2021. Whatever we learn, these extraordinary times nearly guarantee it will be a revolutionary lesson that will have rippling effects for years to come.