How to Dominate the Holiday Season
If you’re like most retailers, the fourth quarter accounts for at least 40 percent of your total annual revenue. Holiday performance can easily make or break the year. How do you make sure consumers spend with you during the busiest shopping season?
One of the biggest challenges during the holiday season is retail planning, and that’s exacerbated by the dynamic behavior of today’s omnichannel consumers. While it’s important to look back at strategies that fed your sales as you plan ahead, it’s vital to account for business and industry changes to avoid becoming “holiday leftovers."
E-Commerce is Converting More Than Ever
The importance of e-commerce is nothing new, but its role in the shopping journey is changing rapidly. Brick-and-mortar retailers should expect the majority of their shoppers to be armed with mobile devices that enable them to read reviews, check product availability and conduct price comparisons on the fly. And we're seeing a significant increase in conversion rates from smartphones. More and more shoppers are not only researching products on your sales floor, they're purchasing from your competitors from there, too.
Advancements in e-commerce, and mobile interfaces in particular, have propelled the channels to conversion machines. Last year, total retail sales grew by 7.9 percent in the traditional holiday season (Black Friday to Christmas Eve). E-commerce sales saw a 20 percent surge. The only way to dominate holiday sales from this point on is to align your strategy across all channels and ensure each one has a fast and easy path to conversion. Make it easy for today’s “always on” omnichannel shoppers to convert the moment intent strikes by ensuring e-commerce channels are connected to real-time inventory levels, promotions and discounts are reflected online, and abandoned carts are recovered quickly through remarketing. All of these tactics will help capture digital sales.
Stratification and Customization Cut Through Noise
Holiday shoppers are deluged with advertisements, and it can be difficult for retailers to be heard. Mass messaging is completely worthless to the vast majority of millennial consumers, who rely on social media shares and recommendations from friends to make purchase decisions. The best way to reach all customers — and the only way to reach some — is through customized messaging delivered directly to their inboxes and social media feeds.
Though the stratification “rabbit hole” can go quite deep, any level of differentiation is helpful. Many websites are able to display customized promotions based on a customer's online behavior. All retailers would be wise to tap into the data they already hold on customers and create strategic promotional campaigns targeted to the different personas contained within their databases. Implementing a simple marketing automation tool with your retail management platform can make the process easy while providing instant visibility into what’s working and what isn’t. With that knowledge, you can then iterate accordingly.
Plan Inventory for the Full Shopping Season
Black Friday no longer marks the beginning of holiday shopping. Most experts agree it actually begins as early as Veterans Day, so make sure inventory is readily available by early November. Similarly, the shopping season goes right until the holidays themselves. Since consumers know they can get free two-day shipping online, the procrastinators are waiting even longer to make purchases. Last year, the biggest day for receipts was the Saturday before Christmas. It’s never too early to start planning the best promotions, pricing and inventory strategies so they can be adjusted as necessary as the holidays approach.
Moreover, demand forecasting for each target market is especially vital, and increasing sales opportunities through online channel partners can help boost sales. Omnichannel fulfillment also plays an important role in smoothing hiccups in merchandise location, so be sure the capability to fulfill from any inventory source is available for holiday orders. With so many options available to consumers, it's just as important to plan inventory for early bird and last-minute shoppers, and everyone in the middle. Technology-enabled inventory management helps avoid overstocks and out-of-stocks, and your retail management software vendor can be leveraged as a partner in tackling uncertainty.
As a final thought, consumers are savvier than ever, and are researching, comparing and converting all over the map. The upcoming holiday season will reward retailers that target and serve these empowered shoppers the right way — and punish those that don’t.
Ian Goldman is the president and CEO of Celerant Technology, a provider of real-time retail management systems.
Related story: What’s Old is New Again: The Rebirth of Brick-and-Mortar