Naughty or Nice? Holiday Strategies That Worked (and Failed) Last Year
The 2020 holiday shopping season challenged retailers more than any previous peak season.
As safety-conscious consumers cautiously flocked to previously less utilized methods that included online shopping; buy online, pick up in-store (BOPIS); curbside pickup; home delivery; and more for their seasonal gift-giving needs, retailers had to adapt quickly and scale these capabilities to meet the booming demand.
Let’s explore what worked, what didn’t, and which capabilities need improvement.
Digital and Contactless Investments Reigned
Understanding how customer experience quickly changed at the start of the pandemic, many retailers beefed up their digital and e-commerce offerings as well as their pickup and delivery capabilities ahead of the 2020 holidays.
For example, Ralph Lauren introduced an online virtual reality portal — along with Snapchat — that enabled customers to explore spaces and shop items remotely. The initiative led to a 10-fold increase in online traffic and subsequent sales.
During the same timeframe, Walmart introduced Walmart+, a paid membership option enabling customers to benefit from unlimited free delivery, scan-and-go touch-free checkout and payment, and fuel discounts. In addition, Target and Best Buy introduced pandemic-prompted, safety-led initiatives designed to attract consumers back to shopping their brands.
Increasing digital options will continue to change store and company operations. BOPIS and curbside pickup are here for the long haul and will require stores to set aside inside space for fulfillment. These capabilities also require managers to schedule employees whose specific job is fulfilling these orders, especially during the busy holidays.
Having different technology touchpoints with customers also requires retailers to maintain a platform approach to their store technology. Every piece of technology and software should be integrated to allow data — such as inventory availability and customer rewards points — to be visible immediately to both customers and employees alike.
A Longer Seasonal Shopping Season Paid Off
Consumers started holiday shopping earlier than normal last year, and that trend is expected to continue.
As the pandemic prompted Amazon.com to delay its summer Prime Day event to Oct. 13-14, Target introduced its Target Deal Days on the same days. Target also ran its Black Friday deals through November. Walmart and The Home Depot had similar initiatives as their Black Friday deals crept from one day to multiples. Other retailers closed their stores on Thanksgiving Day, due in part to safety for employees and consumers.
Deal extensions were part of last year’s success. Target, for example, reported strong sales despite its Thanksgiving closing and has announced it will close on Thanksgiving 2021, too.
Last Mile Should Be First Priority
While extended deals were a boon to retailers’ online sales, the U.S. Postal Service and private shippers struggled to keep up with the influx of packages, with over 1 million holiday orders failing to reach their destination by Christmas Day. At the peak of the 2020 holiday shipping season, CBS News reported an estimated 6 million packages were left behind. Hence, “Shippageddon” was born.
Shipping delays aren't always the retailer’s fault, but brand reputation suffers when consumers fail to get packages on time.
Solutions to shipping delays for retailers this year include:
- Placing more local warehouses and fulfillment centers closer to consumers.
- Increasing high-demand item accuracy predictions to prevent stock shortages.
- Ensuring retailers and customers have real-time inventory visibility. Websites and apps should show whether an item is in stock and where it's available.
Learning From Last Year: The Gift That Keeps on Giving
The 2021 holiday shopping season will likely reflect 2020 in many ways, with online sales breaking records and retailers extending deals over the fourth quarter. Retailers can reflect upon 2020 and continue to bulk up their digital investments and improve their shipping strategies, resulting in an even more convenient and safe omnichannel shopping experience.
That said, retailers that understand and comply with such changes are more likely to make it onto the nice list with their customers this year.
Fatima Roels is senior strategic lead at NCR, a leading software- and services-led enterprise provider in the financial, retail and hospitality industries. Henry Burr is principal business consultant, retail solutions, at NCR.
