Predicting Peak: 3 Lessons for the Holiday Shopping Season
As the key trading period in retail, ensuring a successful holiday shopping season is a matter of survival for e-commerce and traditional retailers alike. But that’s about the only thing retailers can be certain of.
Over the last few years, the shape of the peak shopping season has evolved in new and (sometimes) unexpected ways. While some have rallied against deepening discounts, declaring the "death of Black Friday," others (such as Amazon.com, with Prime Day) seek to create an ever-earlier start to a discount-driven shopping season.
In order to understand the state of play for 2019, we surveyed 400 U.S. and U.K. retailers to see what they predict for the holiday shopping season and how they’re preparing for it. The results reveal the major trends we’ll likely see this year, and where retailers are focusing their efforts to ensure success.
1. An Optimistic Outlook (and an Early Start)
One of the most surprising findings from the research was the level of optimism retailers have for the upcoming peak season. Despite a challenging 2018, retailers are expecting a 25 percent improvement on revenue vs. Black Friday 2018, rising to a 29 percent increase for the holiday season as a whole.
So beyond having a positive mental attitude, what does this mean for retailers? For one thing, it means starting now — if you haven’t already. The survey showed that by August, 77 percent have already started preparations for the peak holiday shopping season. U.S. marketing campaigns start, on average, 3.3 months in advance of Black Friday (vs. 2.9 months in the UK).
2. A Marathon, Not a Sprint
Positive predictions are all well and good, but how are retailers planning on achieving their lofty goals? Rather than a one-day Black Friday blowout sale, it seems retailers are pinning their hopes on spreading discounts across Q4. Just 15 percent will treat Black Friday as a one-day event. In fact, 18 percent of U.S. retailers are running promotions for six days or more. Price-slashing activity will reach a peak during the weeks leading up to the holidays, when 85 percent plan to offer discounts.
This spreading out of peak means that retailers need to carefully consider how they’re going to keep customers engaged throughout the season. One of the top tactics to bring newly acquired visitors back is email marketing — 34 percent said it’s a top channel. However, email marketing is only as good as your customer database, therefore retailers should ensure they have a strong lead capture strategy in place to capitalize on the first surge of traffic ahead of Black Friday.
3. Competition Makes Personalization a Priority
While the outlook for the holidays is merry, retailers are realistic when it comes to the challenges they face, top among these being competition, which was cited by 38 percent of respondents.
In a fiercely competitive e-commerce environment, retailers are well aware they need to tick all the boxes along the customer journey. We saw website personalization grow in popularity as peak season progresses (and as retailers start to learn more about their newly acquired visitors). This was particularly evident among pure-play e-commerce retailers, which focused on website personalization from Cyber Monday onwards, culminating in 32 percent rating it the top tactic for the holiday season.
The results of this research attest to the trends we’ve seen in recent years with our clients. What used to be a race to the bottom for discounts has evolved into a more diverse set of approaches to the traditional peak season. With competition stronger than ever, it pays to be different as much as it pays to discount.
Jay Radia is CEO and founder at Yieldify, a customer journey personalization platform.
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