Recommendations And Research For A Unified Approach To Post-COVID Holiday Demand
Now’s the time to start creating a great holiday shopping strategy. And with the research and recommendations included in this holiday guide, retailers can implement a unified approach to holiday demand that will help meet drive business goals.
Capture Demand In The Upcoming Season Preparing For Q4
Since the pandemic hit, the goal for many retailers has been to find the right balance between safety and availability. This will be no different when it comes to Q4. In fact, working on this balance throughout the summer will put retailers in a good position come the holiday season, when the all-important sales spikes will occur.
But, with so much changing every day due to COVID-19, it can be hard to imagine exactly what Q4 will look like. Many retailers experienced declines in sales in the first half of the year. Total retail sales fell 8.1% in 2020, which was the worst contraction since 2009 during the financial crisis. While a lot of things opened back up in early Q3, coronavirus cases again started rising in much of the US, causing retailers to be more cautious, with some, like Apple, closing stores again.
However, given last season’s ecommerce gains, there’s a lot of justified optimism in the air. And with holiday planning in full swing, it’s important to consider additional factors such as Q4 business goals, potential new customer behaviors, and how businesses can be prepared to capture demand, online and off, while being flexible enough to accommodate swift changes in buying behavior.
The Secrets to Holiday Success in 2020
1) Know Your Business, Know Your Customers
Gather insights from your business and your customers. Determine your goals, find your weak points. Look at recent customer behavior, not just last Q4.
Ecommerce will play a bigger role this year for many retailers. Be ready for loyal and new customers. Prepare your operations to manage major spikes in traffic. Ensure you have modern ecommerce capabilities in place.
The insights you need to create a winning holiday strategy
Right now, given the state of things, it can be easy to act strictly from a business-first perspective. But failing to look outside your business needs can drive customers away. Therefore, it’s important to understand the new realities of the business, but then reconsider these needs based on a unified “customer-first” communication and sales strategy. To do it right, retailers should audit their business inside and out, and then use both sets of insights to decide the best way forward.
Combining these two sets of insights can help determine what a good messaging cadence should be, or how to discount and provide promotions on a combination of items that not only have to move, but are most likely to be of interest to a specific customer.
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Follow a checklist, like this one, to reassess your business and customer needs:
2) Prep Your Online Store
Respond to high volume without sacrificing performance
Cyber Monday has continued to set records year over year. In 2019, Cyber Monday online sales hit $9.42 billion. This year is likely to be no different. With more people avoiding in-store shopping, online sales channels will become particularly important for retailers of all kinds.
Online sales have been a bright spot for many retailers during the COVID-19 pandemic. While a lot of in-store retail is suffering, ecommerce sales are actually going to increase for 2020. eMarketer reports that total online US sales will go from $601.65 billion in 2019 to $709.78 billion in 2020. That’s an increase of 18%.
Key Functions Of A Holiday-Ready Ecommerce Platform
Modern, Headless Technology
Support your ecommerce with extensible technology that can easily flex as your customer volume changes. Kibo’s headless technology is an example of an ecommerce platform that easily integrates with other systems, and can adapt easily to changes.
Ease Of Use
So many retailers are strained for resources right now. The last thing you need is a system that requires extensive coding or a data science team to use. You should invest in a platform that offers a drag-and drop design that is created for retailers, not for coders.
The right ecommerce platform should make it easy to ingest, understand and use data of many kinds so you can evolve into a data-led, not just data-driven, organization.
As you consider your own retail approach this holiday season and beyond, please reach out for help in standing up ecommerce, personalization, and fulfillment solutions.
AMMEX, a manufacturer of disposable gloves used by hospital workers, implemented Kibo’s ecommerce system in order to support increased online ordering. The modern, extensible technology is designed so that changes in site volume would not disrupt the customer experience in any way. When COVID-19 hit, AMMEX experienced a dramatic increase in online traffic. Their site never slowed down and their inventory availability, ordering, and checkout worked seamlessly.
These factors all translate directly to retailers preparing for Q4.
It’s important to have a scalable site that can easily manage ecommerce at a high volume, while still catering to your most important customers at a personalized level.
Spike In Online Traffic
During the height of COVID, AMMEX was able to meet a 8X spike in demand, as essential workers shopped for PPE, with no degradation in performance in order processing or site performance.
3) Offer Safe Offline Fulfillment
Enact contactless fulfillment options with long-term value in mind
For retailers with stores that are operating at reduced volume, new fulfillment options like BOPIS and BOPAC will be important features for capturing as many sales as possible in Q4. In fact, Macy’s is calling curbside their “secret weapon” during the holidays.
Curbside isn’t just a good option for people who don’t want to risk exposure to coronavirus by shopping inside. Curbside is convenient, and people can often get what they want through it faster than with pure online ordering, which usually offers 2-day shipping at best and has seen a timeliness decline during COVID.
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How To Deliver A Great Curbside Experience This Holiday
Curbside Intregration At Store Level
Make sure your ecommerce platform has curbside built in at the store level so you can customize your process.
Use personalized communication with customers and offer lots of detail including a map to the store, directions on how pickup will work, and even promotions and upsell that can be fulfilled upon pickup.
Prepare for heavy volume by creating specific pickup time windows. Consider adding messaging for customers within emails and SMS that allows them to tap a button when they arrive.
Thinking Of Curbside’s Long-Term Value
If stores need to close due to another spike in coronavirus cases, operating with curbside and using a store as a fulfillment center can drive sales and keep the retail brand engaged with local customers. A survey finds that 47% of customers are willing to pick up curbside from a “dark store,” should it come to that again. Repurposing store associates at dark stores to fulfill curbside, and even local delivery orders can take pressure off distribution centers, help with moving store inventory, and help retain valuable workers so that it’s easy to reopen once it’s allowed.
Kibo also finds that curbside pickup is a valuable tool for retailers whose stores are still open, and that many customers like curbside enough that they don’t just think of it as a short-term solution to social distancing rules. One survey we found indicates that 86% of customers want their local stores to continue offering curbside in the future. So, plan curbside as you would any other element of your customer experience, with the lifetime value of that customer in mind.
Internal Kibo research identified the core components of a positive curbside experience, as well as that of a negative one. Keep these points in mind when standing up your BOPAC experience:
Gain The Full Holiday Insights With Our Downloadable PDF
Offer custom experiences to new, returning, and ‘retained customers’
This holiday season, personalization will allow retailers to offer loyal customers their own custom experiences with special deals and unique content. But, it can also help identify new audiences that have the potential to become dedicated customers.
For example, Kibo research shows that the segment of shoppers that were new holiday customers the year before are likely to spend more this holiday season when they return. This segment, “new holiday customers last year,” could easily have been rolled into a general “new customer” segment, but that would be a mistake.
Our research shows that these “retained” holiday-specific shoppers are more likely to convert than even recent returning new shoppers, as illustrated below.
The following two graphs show the conversion rate for new customers in 2018 and the conversion rate increase for the same customers who returned the following year (2019) during the holiday season (Figure 2).
Source: Internal Kibo Data
Sources: Internal Kibo Data
Naturally, as seen in the next charts, Add-to-Cart Rates showed similar gains YOY.
And when compared to all returning visitors, “new holiday customers last year” are more than 120% more valuable than the average returning visitor when they navigate directly to the site, as seen in the left-hand chart. This segment is easily identifiable, and the perfect candidate for personalized messaging.
Client Case Study
Kibo customer Waitrose has a strong personalization strategy that has been tremendously valuable during COVID-19, and that could lend insights to those building holiday campaigns.
When the pandemic hit, thousands of new customers flocked to the grocer’s online site to order groceries for the first time. Fortunately, the company was prepared with an agile site that focused on data-driven messaging and testing to quickly learn as much as they could about their new shoppers.
For example, the company mined shopping behaviors and found that when they served personalized product recommendations in categories like “family meals” and “vegetarian options,” they got significantly improved response rates. They expect waves of online activity in Q4 unlike any past holiday, and are already working on adding further layers of personalization to their fulfillment options, like curbside pickup.
How A Multi-Layer Approach To Personalization Delivers ROI
An end-to-end and multi-layer approach to personalization can allow any brand to give the best possible customer experience to every online visitor.
In fact, further Kibo research shows that deep personalization, even across a 3-page journey, drives increasing ROI.
For visitors that viewed the same number of pages, we observed that by the third personalized page, visitors’ conversion rate increased by 100% compared to someone that viewed three non-personalized pages.
Similarly, by the third personalized page view, that visitor’s cart rate increased by 74% compared to someone that viewed three non-personalized page views.
Therefore, the holiday season customer experience is about more than optimizing individual sites of conversion: users respond best to an experience that is deeply infused with personalization.
Ensuring Holiday Success
When thinking of the months ahead, it’s best to keep in mind that customers will need added help and guidance this season. Already a stressful occasion, holiday shopping conducted in the shadow of COVID will bring added stress and frustration to your customers (and associates). This is where a unified commerce experience that is personalized to individual customer needs and intents can make a world of difference, and drive much-needed revenue.
With the outsized value of retained customers made clear earlier, you’ll want to make sure that your holiday strategy has a long-term vision in mind. Customers, after all, are happy to reward those brands that know and treat them best: Kibo research has shown that those companies that leverage commerce- and marketing-driven personalization in a unified strategy are more likely to deliver ROI of 3X or more, for instance. What’s not to love?
Need Help Creating A Winning Holiday Strategy?
Kibo’s Unified Commerce Platform helps retailers manage supply chain logistics, ecommerce, and marketing personalization through one system, centralizing strategy, increasing agility, and gaining valuable customer insights during the year’s most critical moments.
Learn More About Kibo’s Unified Commerce Solutions