As the thermometer drops and the holiday season draws closer, that signals the beginning of a slew of opportunities for retailers in the coming months. However, despite the promise of the holiday shopping rush to help retailers’ bottom lines and set businesses on course for a successful new year, it's imperative for them to consider "tried and true" as well as new retail strategies to ensure they make the most of the season.
Undoubtedly, there have been challenges in the past few years which have made performing well during the busy holiday season even more important for retailers, and the pressure to deliver for customers and shareholders is an ever-present companion as industry professionals hone their strategies.
While no one can say for certain what the holiday shopping season will hold for retailers this year, looking at ongoing and historical trends can shed some light on the matter. Here’s what retailers may want to keep in mind as they plan how to leverage their digital tools to design better:
Convenience and personalization still reign supreme for shoppers — and that’s unlikely to change. A 2023 study from Synchrony found that by 2030, 80 percent of shoppers will expect “hyper-curated in-store experiences.”
To kick-start their holiday strategies, retailers want to explore tools that support on-site personalization options, an offering that over half (55 percent) of respondents to the above survey said they would like to use. Digital solutions that support inventory intelligence, improved self-checkouts, and tailored promotions could all help in this pursuit.
Retailers may also want to expand their radio-frequency identification (RFID) tagging programs further upstream in their supply chains to get more holistic insights into where merchandise is and when it will arrive. This can also help improve customer experiences by enabling real-time tracking of buy online, pick up in-store (BOPIS) orders and self-service searches of in-stock items via mobile apps or interactive displays on the floor.
On that note, promotions and prices will also be critical this season as economic concerns remain for many customers. In fact, 71 percent of retailers say they’re concerned that consumers will cut their holiday spending in 2023. Using data from connected suites can help retailers fine-tune their holiday deals to offer good prices on in-demand items without hurting revenue.
Of particular use will be shopper behavior and sentiment data which can be leveraged alongside RFID and point-of-sale logs to give more precise insight into how your customers shop. Integrating these datasets can help retailers understand not only what shoppers purchased, but the decisions they made along the way so leaders can balance market trends and predictions with the reality of what’s happening in their stores.
The American workforce is still short many millions of workers, which could be a challenge for retailers banking on hiring seasonal staff. It’s important that retailers start planning for this obstacle sooner rather than later to ensure that they have enough people on deck to meet the rush. For those that think they may be short-staffed come November, exploring tagging-at-the-source programs, Artificial intelligence-enabled monitoring and inventory intelligence suites may help reduce labor demands associated with RFID and EAS systems as well as monitoring shopper behaviors and auditing inventory.
For those that are more concerned about properly allocating the hands they do have than being short-staffed, using real-time and historical data on traffic patterns can help retailers align their scheduling with demand. Analytics suites informed by traffic, sales, dwell time and other metrics can help retailers compare their actual performance on given days in the season with predictions to get more accurate estimates of shopper volumes so they’re always staffed appropriately.
Loss Prevention Programs
Shrink is always of concern for retailers, but the holiday rush can drive up losses alongside sales. More people shopping means more to keep track of, giving thieves ample opportunities to sneak merchandise out unnoticed.
Retailers would be wise to begin evaluating their loss prevention programs now to ensure that they can scale with holiday demands. Looking at data from previous years as well as other, more recent demand spikes can highlight high-risk items and areas to help retailers harden the right targets.
Data from computer vision and other AI-enabled analytics solutions can also help in this regard, as cross-referencing the information from these datasets can give insights into thieves’ tactics, which items are prone to bulk theft events, and more. Meanwhile, RFID systems can help on the other side of the coin, acting as proof of a stolen item's origin and giving retailers the chance to recover stolen goods.
Putting the Pieces Together
The holiday season’s reputation as an unpredictable and overwhelming time of year is well-deserved, but it’s not insurmountable. While it used to be a time marked by guesswork and gut feelings, today’s retailers have the tools to bring many aspects of their operations back into their control.
With the industry’s recent investments in digitalization and customer experience improvements, most retailers already have the data they need at their fingertips. They just need to find the right ways to use it. When they do, they’ll be able to rest easier — during the holiday season and any other time of year.
Brian Field is the global leader of retail consulting and analytics at Sensormatic Solutions, the leading global retail solutions portfolio of Johnson Controls powering operational excellence at scale and enabling smart and connected shopper engagement.
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Brian Field oversees the Global Retail Consulting Practice as senior director at Sensormatic Solutions. He provides retailers with insights that drive revenue while controlling the bottom line. Prior to joining Sensormatic Solutions, Brian spent the better part of four decades working directly in retail. His experience includes strategic planning and analysis, direction of store finance and store operations, store systems integration and project management, store sales and management, training design and merchandising. Brian’s retail sector experience includes Specialty Apparel, Consumer Electronics and Housewares for companies as diverse as Chico’s FAS, Circuit City, and Macy’s.