Home for the Holidays: Preparing for the Shopping Season and the Year Beyond
Paleontologists and evolutionary biologists often speak of “punctuated equilibrium” — a time of rapid evolutionary change following a long span of stasis. Such periods occur following a cataclysmic episode — e.g., the massive asteroid strike that wiped out the dinosaurs. COVID-19 is a punctuated equilibrium event for retail. It changed everything, and many of these changes will be permanent.
To understand retail during these turbulent times, we've monitored the shopper mind-set through multiple consumer research surveys. In addition, we've kept an eye on trends in retail's response to customers’ shifting shopping behaviors. These efforts have illuminated key considerations for businesses navigating the 2020 holiday season. (This two-part series will first examine best practices for how to communicate with customers, and then highlight what actions you should take in your corporate policies and processes in the future.)
A customer who feels valued and understood during these difficult times will reciprocate with the best of all possible gifts — loyalty. How you speak with your customers will be paramount.
Things to remember:
Transparency is Key
Companies with clear and easily accessed information are seen as trustworthy. Accurate product information, including sustainability details, stock status, and comprehensive shipping and delivery information, isn’t simply an incentive for shoppers. It’s a necessity for retailers.
In conducting the research for our 2020 Global Consumer Survey Report, we found that 65 percent of all shoppers had encountered out-of-stock issues in the first months of the pandemic. Subsequent confusion over in-store and online stock status, shipping time frames, and back-in-stock projections led to immense shopper frustration and anxiety. Of consumers surveyed in the U.S., Canada, Europe, and the Middle East, 48 percent stated the projected speed of delivery had a major influence on the retailers and brands they chose to engage with.
Communicate Your Safety Measures
Consumers are fearful about in-store safety. To ensure customer confidence, merchants must openly address apprehension about social distancing, sanitation, contact with associates and other shoppers, and general safety measures.
Our research confirms great customer concern exists about in-store safety across international markets. For the U.S., 53 percent of shoppers want face masks required; that figure is 44 percent for Canada, 45 percent for Europe, and 75 percent for the Middle East. Hand washing or sanitizing stations are demanded by 65 percent of U.S. consumers, 72 percent of Canadians, 69 percent of Europeans, and 82 percent of Middle Eastern shoppers. And floor markings to facilitate social distancing are supported by 45 percent of Americans, 64 percent of Canadians, 53 percent of Europeans, and 63 percent of consumers in the Middle East.
Consumer confidence and sales can be maximized by addressing these concerns. By showing responsibility for your consumers' health and well-being, as well as your associates, you establish yourself as a good citizen and a responsible retailer. In our consumer research survey, we found that almost one-third of global shoppers have witnessed and approved of the merchant precautions being taken.
Reward Your Loyal Customers
Research confirms that consumer loyalty correlates to sales. The more loyal the customer, the more products she/he purchases. A Salesforce survey found that 84 percent of consumers declared that shopping experiences are as important as the goods or services obtained. Furthermore, research from Siegel+Gale found that $98 billion is lost annually by retailers that fail to give their customers simple — but meaningful — shopping journeys.
Loyalty programs are effective at earning customer allegiance. Members of such programs covet status levels and earn rewards. But beware: any uncertainty or difficulty with either can backfire on the merchant, creating deep distrust. Merchants should contact members frequently, offering incentives to maximize engagement — think double-point days and exclusive offerings. As stores slowly reopen, consider implementing dedicated shopping hours for loyalty program members.
While COVID-19 spread, many merchants extended the expiration dates of rewards and other incentives, in some cases even lowering status levels to make them more attainable. Such steps reassured loyal customers that they wouldn’t have to worry about expiring benefits as they wrestled with uncertainties of the pandemic.
The Way Forward
So, what’s the bottom line for the 2020 holidays?
There’s no point in playing Pollyanna: the retail environment likely will remain challenged through 2020 and beyond. Retailers will compete for customers and sales, and the laurels — and revenues — will go to the quick, smart and informed. It’s critical to stay in touch with your customers, to determine their needs and desires in an ongoing fashion, and respond rapidly when those needs change.
Kylee Magno is a principal analyst at Astound Commerce, the world’s most trusted independent digital commerce specialist, empowering success through experience-driven ecosystems that fuse technology, data, design and storytelling to propel business growth.
Related story: Consumer Behavior: Now and Post Coronavirus Pandemic