The close of the holiday season brought plenty to celebrate, with sales outpacing predictions and eCommerce once again fueling overall growth with double-digit gains. But that doesn’t mean sellers can take success for granted in 2018. Rather, to remain competitive they must continue to implement the holiday strategies that showed success and focus relentlessly on the customer’s point of view — ensuring their brand experience stands out.
Holiday retail sales overall rose 4.9 percent year-over-year, the biggest increase since 2011, according to preliminary results from Mastercard SpendingPulse. The strong showing beat the National Retail Federation’s prediction of a 3.6 to 4 percent gain.
As in previous years, online commerce was the engine driving overall growth: eCommerce revenues jumped 18 percent, according to Mastercard. Mobile commerce demonstrated its worth, with fully a third of sales on Cyber Monday originating on mobile devices, according to Adobe Data. Mobile traffic and revenues spiked still higher on Christmas Day and New Year’s Day, when consumers were away from their computers but still at leisure to browse and buy.
While the rising holiday tide lifted all boats, giving retailers respite from doom-and-gloom forecasts, there were clear standouts. Those who outpaced the pack went well beyond simply offering standalone eCommerce, mobile, and store “channels” to creating integrated, alluring experiences.
The principles behind the leaders’ winning strategies are worthy of consideration. As we’ve written previously, merchants of all stripes must contend with Amazon, which captured 44% of all online sales in 2017; by learning from the holiday highlights, merchants stand a better chance of differentiating their brands and earning sales in 2018. Among the principles to consider:
Reimagine brand offerings as experiences, not commodities.
Most merchants can’t afford to compete with the likes of Amazon on price alone. So to appeal to shoppers, sellers must create value in the brand experience itself — shifting the focus from a pure calculus of products, order costs, and discounts toward something more ineffable. Rich online content, customer communities, savvy apps, and immersive store environments must work in concert to create a connection with the brand that goes beyond the price tag. Personalization can further enrich the experience by delivering only the most relevant products, store events, how-to content, and recommendations.
For retailers, the experience imperative means rethinking store space to accommodate consultative sales, interactive displays, and signage and shelf tags that connect shoppers to online resources. For manufacturers, definitive and robust online content about products, apps that serve essential needs for customers, and stellar customer support can go a long way toward delivering a standout experience; popup stores within retail outlets or at key events can boost visibility in the physical world.
Lululemon Athletica, which saw sales jump 15% year over year during the fourth quarter, has built community both via an online hub and in physical stores, where customers can not only shop for athletic apparel, but take yoga classes and get recommendations for local fitness classes to try.
Don’t let customers see you sweat the details.
Part of creating a rich brand experience means eliminating distractions and barriers, especially when it comes to purchasing and fulfillment. By easing logistics so they can essentially be taken for granted, merchants can help maintain the focus on the products and services that inspire and delight.
Of course, a seamless customer experience is the result of complex technology integrations behind the scenes. Manufacturers must quell concerns about channel conflict and ease connections with products, whether by seamlessly displaying inventory availability through retail partners, by offering “buy now” capabilities for direct-to-consumer sales, or both.
For retailers, real-time inventory visibility is by now essential. Indeed, 81% of consumers have used inventory lookup tools before visiting stores, and 80% said they’d be less likely to patronize brands that didn’t offer the capability, according to Kibo data.
And enterprise-wide inventory visibility can help merchants serve customers whose expectations for flexible, fast delivery continue to rise. During the holiday season, mass merchant Target used store outlets to fulfill some 70% of online orders, thereby leveraging its nationwide network to draw on existing inventory and deliver efficiently to customers. Target reported overall sales gains of 3.4% for November and December, with online sales growing 25% for 2017.
Know when to set loose the machines — and be transparent about it.
There’s no question that artificial intelligence is on the rise. In 2018, one in 10 purchase decisions are forecast to be mediated by intelligent agents such as Amazon’s Alexa, according to technology researcher Forrester. To compete, sellers must stay at the forefront of AI offerings, and understand the benefits and drawbacks. While attempting to replicate the complex interaction of a store associate helping a shopper — with all the intuition, body language, spoken intonation, and visual cues that entails — is a long ways off, simple AI applications can now handle the straightforward requests that comprise the bulk of customer service inquiries.
Direct-messaging chatbots can deliver store locations and hours, book in-store appointments, locate assembly instructions or how-to videos, and update delivery status for orders — thereby freeing human live chat and phone service agents to tackle the truly complex interactions that call for nuance and higher decision making. Such partitioning of labor delivers superior service to customers: chatbots can quickly handle volumes of simple requests, thereby fulfilling expectations for quick response, while in-depth human interactions for complex questions demonstrate brand know-how and commitment to service.
During the holidays, Best Buy’s chatbot delivered order status information and fulfilled other simple requests. The service identified itself as an automated response system, rather than attempting to pass itself off as a human — thereby clearly setting expectations for its capabilities. The system used verification questions to maintain privacy and security when accessing order information.
Which successful holiday strategies will you carry into 2018 to drive sales and loyalty?
