Learning From the Holiday Season, Part 1

Over the 2017 holiday season, total sales rose by 4.9 percent, the biggest increase year-over-year since 2011. Consumers shopped via a variety of channels, but the biggest winner was e-commerce: online sales were up 18.1 percent from the previous year.

To understand the ways consumers shop and the experiences brands and retailers offer, Astound Commerce conducted a comprehensive review of the holiday shopping season. This research spanned a 1,000-person consumer survey, along with an analysis of physical stores, social media and mobile shopping experiences. The research uncovered key shopping trends and habits that companies need to be aware of. We’re excited to present this research as a three-part series for Total Retail, and will dive into the data with an exploration of the role of the physical store in today’s shopping environment.

The Role of the Physical Store

Astound Commerce’s consumer study revealed that 73 percent of shoppers will make more than a quarter of their purchases on Amazon.com, and one in four will complete over half of their purchases through the company. With the shadow of Amazon looming over its competitors, many strategists wonder when shoppers will abandon the physical store altogether.

But even Amazon knows this isn’t true, given the much-anticipated opening of its first Amazon Go store. Clearly, there’s still a chance to save the brick-and-mortar model.

The S.O.S.: Save Our Stores report examines what makes a successful, enticing brick-and-mortar customer experience. During the 2017 holiday season, we analyzed 23 metrics relating to the in-store experiences of retailers across eight consumer categories to identify what makes or breaks a brick-and-mortar store. Here are four questions to ask yourself to preserve your brick-and-mortar retail viability:

1. How inspirational is your retail shopping experience?

Consumers go to stores for a more immersive, engaging experience than they can get from online shopping. In fact, 73 percent go simply to touch and feel the products themselves. The best in-store experiences we observed were inspiring ones: environments with excited, passionate sales associates, unique products, and inviting displays.

The stores that mastered this included Nike, Sephora and Apple, all of which displayed inviting, visually engaging environments, strong signage and appealing merchandising tactics.

Your physical locations should ensure products stand out, with a point of view reflective of your brand identity as well as well-conceived, exciting designs. Additionally, incorporate your loyalty strategy into your in-store experience, and use your brick-and-mortar store to encourage new participation. Train associates to ask shoppers about their experiences to reinforce loyalty’s value and connection to your brand.

2. How promotional is the store?

Often, brands trade inspirational experiences for promotional ones in-store. While brands should take advantage of brick-and-mortar locations for promotional purposes, they must be strategic about them — i.e., don't overwhelm shoppers with a sea of discounts (which they can already find online).

Instead, offer exclusive products and deals that drive traffic, create excitement and secure greater margins. Pay close attention to tactics that have worked online before and replicate them in-store when it comes to promotions. You can also use signage to enhance the experience rather than just advertise deals.

3. How service-oriented are you?

Our research shows that 64 percent of consumers will leave a store due to poor service. To keep a brick-and-mortar store viable, brands must provide excellent service that adds value to the customer experience. Otherwise, shoppers will jump ship.

This starts with adequately staffing locations (with floor support, not just cashiers and stockers). Floor staff should be proactively helpful, engaging consumers before they need assistance to create stronger relationships. Remember, the power of suggestion is strong: if staff is friendly and excited about the merchandise, customers will follow suit.

There were certainly clear leaders in this portion of our research. Barnes & Noble, Coach, Crate and Barrel, and Amazon performed admirably, staffing locations with helpful, friendly and knowledgeable associates.

4. How efficient is your overall experience?

Given the convenience of online shopping, brick-and-mortar stores must be especially efficient to attract customers. Long checkout lines will only drive consumers back online (and potentially to competitors). Given an average 2.21 minute checkout time and a 1.92 minute return time, it’s clear that in-store brands are learning this lesson (but could still improve).

With that in mind, make your in-store experience as streamlined and convenient as possible. Staff enough cashiers to keep lines moving, and offer mobile point-of-sale options to speed up transactions. Additionally, it’s worth it to have a dedicated return-only customer service associate to save time for all shoppers. Anything that reduces time spent in lines and not browsing products can improve your in-store experience.

The brick-and-mortar model is far from dead, but only for brands that can create an engaging, exciting experience that makes it worth it for shoppers to get off their phones and into your store. 2018 should be the year to re-engage customers with your more powerful physical stores encouraging shopping in all of your channels.

For parts two and three of the series on holiday shopping results, I will dive deeper into how customers shopped during the holidays on mobile devices and through social media. The mobile channel has become critically important for any retail success, and social media provides a unique avenue for connecting with consumers.

Sebastian Klare is the vice president of global marketing at Astound Commerce, a global digital commerce agency.