The Return of Return Season: How LCNC is Helping Retailers Prepare for the Post-Holiday Rush

In a media cycle full of daily shocks and surprises, there’s comfort in the mania of the holiday shopping season. Each year, we know a few things will happen — endless speculation on consumer spending habits, earlier-than-ever deals and sales, and a frenetic spin-cycle of shopping and returns that ultimately deposits us into the darkness of mid-January. Sound familiar?

While it’s customary to note that retailers have been preparing for the holiday season for months, the truth is that they never stop thinking and tinkering. How will the economy impact buying behavior? How strong are my supply chain/fulfillment partner relationships? And how can I outmatch, outpace and outearn our competitors?

The Past is a Prologue

Last year’s shopping season played out amidst a few key storylines: ongoing inflation concerns created cautious consumers, new tech trends like NFTs and the metaverse led to a bevy of bizarre (and short-lived) marketing pivots, and retailers tried desperately to improve their in-store shopping experience. But despite predictions of doom and gloom, sales were actually up. According to Mastercard, U.S. retail sales in 2022 increased by 7.6 percent compared to the same period in 2021, while online sales grew by 10.6 percent year-over-year (YoY).

The post-mortem meetings after each holiday season must seem like a ride on a Willy Wonka elevator — everything is either up, down, sideways or through the roof. Perhaps the biggest surprise was the marked uptick in consumers returning to brick-and-mortar stores. Data from the National Retail Federation (NRF) showed that in-store Black Friday traffic in 2022 jumped by more than 6 million consumers YoY. And retailers have taken notice, scrambling to beef up their service and support to better serve these same customers if/when they return in 2023.

How Tech Will Streamline Holiday Shopping and Returns

According to McKinsey, consumers are becoming more connected, less loyal, more informed, and channel agnostic. “To become more responsive to these trends,” the management consulting firm says, “retailers can harness technology as a core enabler to support the seamless integration of online and offline channels … that facilitate end-to-end customer decision journeys.”

Given the costs and resources required to continuously update rapidly changing digital offerings, it’s no surprise that many retailers have turned to low-code/no-code (LCNC) development platforms which allow those with little to no knowledge of traditional programming languages to create specialized applications for immediate use. For retailers, this provides the necessary agility to quickly build/update apps, analyze real-time data, and automate workloads. Starbucks, for example, used LCNC when the pandemic strained its IT resources, enabling it to work through a backlog of development tasks much faster than with traditional development, according to the company’s Chief Digital and Analytics Officer Jonathan Francis.

Here are three other ways that LCNC tools are helping retailers not only optimize the holiday shopping season but also the lucrative holiday return season:

1. Infrastructure for Hybrid Shopping and Curbside Pickup

Adobe Analytics reported that the share of U.S. e-commerce sales filled through pickup was up 76 percent in June 2023 compared with January 2019. Industry experts equate the rise as a response to the increasingly high costs of the “last mile” of e-commerce that shifted consumer behavior from online deliveries popular during the pandemic to less expensive curbside pickup. Whatever is driving the activity, stores are loving that it’s bringing customers closer to their physical location to experience their brands closer up.

To account for this likely increase in curbside traffic around the holidays, retailers have been creating seamless hybrid shopping and pickup experiences using LCNC tools to develop/deploy specific apps for order processing and fulfillment. These apps can also link to customer data software, analyze behaviors, and provide personalized recommendations in real time, resulting in higher engagement, conversion rates, and customer satisfaction.

2. AI/Chat-Based Customer Service

The recent craze for generative artificial intelligence-powered chatbots like ChatGPT happened too close to the last holiday season for retailers to take advantage of, however, expect that to change in 2023. Shoppers have become accustomed to instant customer support, and there’s little chance they would expect any less during the holidays. In fact, Salesforce has predicted generative AI will influence $194 billion in global online holiday shopping spend for the 2023 holiday season.

From a customer service perspective, AI chatbots can play a role in the entire consumer decision-making journey — e.g., from responding to questions about gifting trends to handling the higher volume of inquiries about returns/exchanges. On that note, AI chatbots can also reduce the burden of seasonal hiring by requiring less support staff, a problem that hit retailers hard in 2022.

3. Customer History Makes Returns Easy

With holiday deals starting so early this year, there’s more time between purchase and return to, well, purchase and return. Harvard Business Review reported that U.S. consumers returned 16.5 percent of purchases in 2022, costing retailers an estimated $816 billion in lost revenue. Industry research suggests that “cross-selling products during the return process is an effective strategy to reduce this revenue loss” and potentially bolster new customer relationships.

LCNC tools can be used to build a robust customer purchase history that better tracks their shopping history, buying behavior and preferences, allowing for hassle-free returns. And while returns are an endemic part of the retail industry, the process is ripe for continued disruption. Smarter returns management yields happier customers, is more likely to result in an exchange rather than a return, and helps retailers get inventory back into circulation faster.

The Future of the Presents

It might be too late for retailers to impart any meaningful change in their digital strategy ahead of this year’s holiday season, but it’s still a great time to test and learn new methodologies. As Deloitte puts it, “… this year’s experiences will serve as a helpful lens for the future” because “the ways consumers address their holiday desires amid these rapidly changing economic conditions will indicate the longer-term trends to come.” Those trends are sure to happen faster and faster, which means LCNC solutions will be that much more necessary to keep retailers agile and customers happy.

Whatever be the learnings this year, what's most important is that AI requires a huge amount of data that will be gathered in the next few years. The future will belong to those who can predict buying and returns behavior and rapidly change their business model. Ultimately, it's the business model based on insight that counts.

Mohan Madhurakavi is the chief evangelist of digital transformation at Kissflow, a low-code application development platform.