Navigating a Holiday Season Like No Other
We’ve gotten used to people saying that every holiday season is going to be a season like no other. This year, it’s not hype. This season will be like nothing any of us has seen.
The ripple effects from COVID lockdowns and the ongoing uncertainty that the pandemic continues to foster have retailers working smarter and faster than ever to ensure a successful end of year.
The Holiday Season Starts Earlier
Signifyd’s Ecommerce Pulse data shows that e-commerce spending was up 23 percent in the beginning of October compared to a year ago. Not only that, basket sizes are bigger, with the average order value increasing by 19 percent year-over-year.
Consumers are taking note of the supply chain crunch and are shopping early to ensure they get the gifts they’re after. Any year that big retailers like The Home Depot, Costco and Walmart are chartering their own vessels to ensure they get their goods to the U.S., you know something unprecedented is going on.
So, what are the best in the business doing to increase their sales amid all the disruption? Based on our conversations with the merchants that make up Signifyd’s Commerce Network, I can offer this:
First, they're putting the “omni” in omnichannel. Essentially, they're turning their stores into fulfillment centers. The acceleration in rolling out curbside pickup in particular has been astounding. The growth in curbside’s popularity during COVID is understandable. But having local fulfillment hubs for curbside and buy online, pick up in-store is also a big advantage given today’s shipping delays. It allows retailers to leverage their inventory everywhere — moving products within their networks to where consumers are demanding them.
It also brings great comfort to consumers, who are worried about whether a given order will arrive on time for the holidays. When they’re picking it up themselves, within hours of ordering, that stress is gone. Curbside just makes that process so much easier, and it allows for contactless delivery, which is important for a lot of people as we work through the Delta and Omicron variants.
Second, retailers are keenly focused on the challenges that supply chain disruptions bring. They're putting themselves in their customers’ shoes. They’re being transparent about inventory on their digital sites, deploying “back-in-stock” notifications, and reassuring shoppers with notification alerts when products are available.
No doubt, they're committed to running e-commerce sites that accurately reflect inventory levels. I’ve even read about some retailers that are referring shoppers to competitors who have what the customer wants when they can’t provide it themselves. It’s like that old Christmas movie, “Miracle on 34th Street,” where the department store Santa at Macy’s is sending parents to Gimbels to get the toys their kids want.
Lastly, along with transparency, the most successful merchants are showing agility with their merchandising, marketing and messaging. They're ready to shift their advertising and pivot their messages to promote the stock they have available to make sure they're not promoting items they simply can’t get because of supply chain issues. There are few worse customer experiences than seeing a promotion, getting excited about taking advantage of that promotion, and then being told the item isn’t available. That’s the kind of thing a customer remembers for a long time.
Building the Best Customer Experience
As e-commerce has become a much more significant portion of retailers’ revenue, the best have also worked hard to remove any barriers to online shoppers who actually want to buy something from them. Every retailer would be wise to analyze their tech stacks and their order flow. Is anything getting in the way of a sale? Are tools or systems meant to screen out fraudulent orders also blocking legitimate customers from making purchases?
Signifyd has found that as many as 10 percent of orders are declined at checkout by legacy, rules-based fraud solutions when only about 1 percent of orders are actually fraudulent. Think about what that 9 percent is worth. Not to mention, think of how the shoppers on the other end of that 9 percent feel. Chances are they’re not going to be too excited about coming back to shop with the retailer that turned down their order.
We’ve also found that retailers aren't just focused on increasing the number of holiday sales they make; they’re interested in increasing the number of holiday sales they keep. Returns, when you think about it, are “un-conversions.” You make a sale, you celebrate the conversion and then on Jan. 15, that product comes back to you and the sale disappears. Returns are evolving. They’ve become more of a pain point as more retail moves online and consumers can’t examine what they’re buying. And the opportunity and incidents of return abuse and fraud have become more prevalent as the nature of shopping evolves.
Think of the rise of buy now pay later (BNPL). BNPL makes it easier than ever to wardrobe. A shopper who couldn’t afford the upfront investment to order three or four variations of the same piece of apparel, for instance, can now get the items shipped for only a fraction of the cost. The workaround means retailers are more likely to find themselves receiving returns of seasonal apparel that's no longer in season — or saleable.
Lastly, retailers are seeing a wave of new customers who have developed an online habit during the pandemic. The best merchants among them are figuring out innovative ways to replicate the in-person experience. They’re turning to online consultations and personal shoppers — meaningful steps to build a genuine relationship with customers they want to see back time and again.
Retailers that are the nimblest and successfully implement these best practices will be the ones reaping the rewards this holiday season, while others may be left wondering how the Grinch stole all the profits from their bottom line.
Ashley Kiolbasa is director of product and customer marketing at Signifyd, an e-commerce fraud protection platform.
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Signifyd Director of Product Marketing Ashley Kiolbasa serves as the conduit among Signifyd customers, product designers and the online retail market. She is a customer-obsessed marketing leader who is passionate about identifying key market opportunities. She is a key driver of Signifyd’s go-to-market strategies and directs the team responsible for Signifyd’s robust customer relationship programs, including regular FLOW events, the customer advisory board and the annual 30 Most Influential in Ecommerce awards. Ashley also holds a Bachelor of Arts (BA) degree in Communication from the University of California, Santa Barbara, and an International MBA from the IE University in Madrid.