Lessons Retailers Can Take From the 2014 Holiday Shopping Season
As for macro-economic trends, it's imperative that retailers learn to read between the lines in order to better direct their marketing efforts. Many are making intelligent use of customer data analytics as a powerful predictive tool.
For instance, why didn't lower oil prices and "improved economic indicators" lead to blockbuster holiday sales as expected? Tuned-in retailers may already know that for large swaths of the lower and middle classes, the on-the-ground realities of accumulated debt, stagnant wages and higher food costs washed out any savings from cheap gas.
Being squeezed by the recession for so long has caused many shoppers to adopt more conservative spending habits. It appears that many of those who used extra cash to shop on Black Friday and Cyber Monday discounts did so for practical reasons, replacing home appliances, furniture and electronics. Gleaning such insights from customer data can enable more effective marketing efforts, inventory forecasts and demographically targeted promotions.
Online-only retailers have some advantages (e.g., troves of customer data), and 2015 is the year to capitalize. Use it or lose it, as they say. In 2011, sales by web-only retailers passed web sales by retail chains for the first time. Web-only retailers continue to grow much faster than their brick-and-mortar counterparts, steadily widening the gap each year. Many retail giants like Target are just now going through a digital transformation by adding e-commerce experts to the C-suite, pouring money into mobile shopping sites and apps, and updating inventory systems to handle the omnichannel challenge.
While the big guys play catch-up, the digital natives (i.e., those who never operated on a brick-and-mortar business model) are continuing to gain traction. E-commerce retailers should focus on improving what they already do best — building appealing, fast, easy-to-use websites and apps; integrating social media; and securely fulfilling orders anytime, anywhere.