Personalized Marketing and Merchandising Rule as Digital Commerce and In-Store Shopping Converge
As retailers are tallying their holiday profits and setting a course for 2014, there are five ways that merchants can capitalize on their earnings and avoid pitfalls. The responsibility of retail profit margin and loses largely falls on marketers and merchandising leaders. By working together, they can improve their understanding of customer demands and product preferences.
Rapid market shifts are causing merchants to re-examine the way that they establish relationships with customers and deepen these connections in-store as well as with on-the-go mobile shoppers and online buyers.
While online sales continue to outpace offline — increasing 20 percent on Thanksgiving, Black Friday and Cyber Monday during the 2013 holiday season — the fact remains that the majority of retail sales still happen in-store. What complicates matters for retailers is the increased use of mobile devices to comparison shop online, even as the consumer is standing in their store. In fact, mobile traffic and sales in the fourth quarter of 2013 grew by an astounding 40 percent and 46 percent, respectively, over the same period in 2012.
The challenge for retailers is finding the right balance between online, mobile and in-store promotions that deliver the best deals to shoppers and protect their personal information, while safeguarding year-end profits. Those that succeed have the right balance of marketing and promotions and are merchandising a mix of products. The savviest retailers use advanced analytics to help build integrated plans around individual customer preferences, taking into account real-time inventory levels and fulfillment cycles. The goal is to deliver the right deal at just the right time to the right customer.
This is no easy task, especially with a new generation of consumers that are more connected than ever before. They expect the same prices and product availability regardless of the channel they use to buy. To meet these new demands while continuing to grow revenue and profitability, there are a few things retailers can do:
- As marketing and merchandising converge, retailers can gather nuggets of data to establish a one-to-one dialog with their customers.
- Combining data with location services, retailers can predict when a customer will be browsing their store's aisles and what merchandise customers are planning to buy before they arrive.
- Based on knowledge of a customer's shopping habits, retailers can formulate their inventory/merchandise mix that advance sales and grow profit margins.
- Consider flash sales as an opportunity to sell off merchandise while uncovering customer affinity.
- Be it stores, online or mobile shopping, all channels should deliver consistent offers.
Christmas in July
The art and science of having a successful holiday season begins well before the first snowfall. In fact, most retailers have their holiday plans in place by July.
With data growing at an astonishing rate, 75 percent of companies have a big data project underway. In the retail industry, holidays and special events are opportunities for marketers to engage shoppers.
Back-to-school season and other key shopping days like Labor Day serve as a testing ground for retailers to ensure they have the right product mix. In addition, these shopping days also provide retailers with a better understanding of the types of products and brands that consumers are buying.
By the time the holidays roll around, businesses using retail and marketing analytics already have the information they need to begin delivering relevant promotions to drive in-store traffic and online shoppers alike.