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:
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. To compete, sellers must stay at the forefront of AI offerings, and understand the benefits and drawbacks. Shoppers now expect merchants to be able take into account their past interactions with the brand when it comes to site offers and content, and while personalization has been a buzzword for years, the latest real-time individualization tools can help merchants realize the goal of providing one-to-one shopping experiences.
While much is made of technologies that churn through behind-the-scenes big data to power product recommendations, merchants can also deploy features that ask shoppers to volunteer information outright. By taking a page from concierge-style startups like StitchFix and Trunk Club, merchants can ask shoppers to create style profiles that can then be used to inform product recommendations, buyers’ guides, and in-store personal shopping services; or, on a smaller scale, merchants can ask shoppers interested in new products from a particular line or brand name to sign up for alerts of upcoming launches.
Robust loyalty programs. Merchants are increasingly investing in customer retention, and for good reason: returning buyers comprise just a third of customers, but account for 42% of online revenues, according to Forrester Research, Inc. Merchants can use loyalty points to their advantage to encourage engagement with the brand, offering rewards for activities that enrich customer profiles as well as deliver on the promise of personalized products and services.
Offering exclusive perks — such as free expedited shipping for last-minute holiday shoppers, sneak peeks at new products, dedicated VIP BOPIS pickup counters, and members-only in-store events — can extend the benefits of membership beyond product discounts, and help customers maintain ties with the brand.
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.
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.
Furthermore, if associates go on to help shoppers purchase one of those items located elsewhere, a whopping 92% of them must conduct those transactions at a register or computer terminal, rather than completing orders in-aisle. And 24% of associates can’t even help place such orders at all, forcing shoppers to fend for themselves if they want to claim items at other locations. In an era when self-checkout is ubiquitous and checkout-free prototypes such as Amazon Go are establishing new expectations for seamless in-store transactions, such hurdles are increasingly unacceptable. Merchants should invest in solutions such as Kibo’s mobile point of sale to give associates the flexibility they require to meet shoppers’ needs wherever in the store interactions take place.
Which successful holiday strategies will you carry into 2018 to drive sales and loyalty?