Retail Holiday Guide 2020: Industry Perspectives
Editor’s Note: This post is part four of our 2020 Retail Holiday Guide. Click the links to read part one, part two, part three, and make sure to get our free 2020 Holiday Guide for Retail—it will help you plan for a successful 2021 too.
Holiday traditions are definitely going to look different this year. Mistletoe is obviously a non-starter, and many of us will probably be trading our family celebrations for Zoom gatherings instead. The way we shop has also changed. Bouncing from store to store, waiting outside stores for their opening, and joining elbow-to-elbow throngs of fellow shoppers are also probably not in the cards—if not downright prohibited—in 2020.
But traditions can and do adapt to changing times, and so can retailers as they plan for a truly unusual holiday shopping season. In our previous posts, we went over what retailers might expect to see and how they can prepare for a season in which the rules are being rewritten. In this post, we’ve gathered thoughts from retailers and analysts on the front lines about this year’s shopping trends and how retailers can use data to adjust to this new, ever-evolving reality.
Ecommerce for the Win
Not surprisingly, given spiking COVID-19 infection rates, customers are likely to do a lot more online than in-person shopping this year. “Ecommerce is likely to be a big winner because consumers have shown a clear movement towards buying online rather than at brick-and-mortar stores,” said Daniel Bachman, a U.S. Economic Forecaster for Deloitte.
Shippers seem to certainly think this will be the case: “We’re preparing for a record peak holiday season. The COVID-19 pandemic has made our services more important than ever,” reported Charlene Thomas, Chief Human Resources Officer at UPS.
This is great news for ecommerce retailers, but perhaps less so for brick-and-mortar stores that have only dipped a toe into online shopping. However, with a customer data management solution like a CDP, retailers can analyze and translate their in-store traffic and trends, as well as customer data, to forecast and optimize their online offerings and CX. Retailers that have already integrated data between the physical and online channels will have an easier time adapting, and online sales may even help make up for the drop in in-store revenue.
CDP Boosts Quick Inventory Turnover for Higher Revenues
Visibility into inventory and shipping data will also be key to retail success and customer satisfaction this season. Retailers will need to be able to pull real-time data on product availability across locations and warehouses to fulfill orders and quickly respond to customer queries. Data integration with shippers will ensure customers can choose an option that gets gifts to their destinations on time while letting them monitor delivery.
With the capacity to connect unified data from diverse sources, Treasure Data’s CDP can do all that as well as trigger automated email or text alerts about orders from the time they are received to the moment they are shipped, giving customers peace of mind and optimizing CX efforts.
CDPs can also help get inventory to the right location, based on predictive analytics and customer data. For example, Stripe International Inc.—which was already using a CDP for targeted advertising, promotions, and CX—wanted to hyperlocalize its inventory to sell it all. The objective was to use customer analytics to predict which stores would be most likely to sell more, based on the previous behavior of each store’s customer base and the near real-time data about buying patterns. In addition, today the Treasure Data CDP updates and adjusts its AI-driven predictive analytics models in near-real-time, so that reordering from suppliers is continuously adjusted and expedited based on fresh incoming customer data.
The results at Stripe were impressive. Revenue attainment shot up from about 90 percent of goal to more than 160 percent of target in about three months. The Apparel Division’s budget vs. actual performance improved, as more frequent stock follow-ups led to fewer lost opportunities and higher sales.
“Demand prediction and stock optimization prevented opportunity losses, maximized sales and improved the bottom line,” says Kazuki Enomoto, Director of Data Platforms from the Digital Transformation Operations of Stripe International Inc. “And another indirect benefit is that as their work efficiency increased, the staff were able to spend more time attending to the customers, which contributed to better customer experience.”
Fewer Experience-based Gifts, More Stuff
The pandemic may also be driving a shift toward gifts that are more tangible—good news for product retailers. “In the past couple of years, we’ve seen a shift to gifting experiences: sporting events, trips, concerts,” said Natalie Kotlyar, Retail and Consumer Products National Leader at consulting firm BDO. “This year we’re going to be moving away from that, back to more traditional gifts like electronics and toys.” Items that make homes more cozy and comfortable—everything from baking equipment to smart devices—are expected to rise in popularity.
However, retailers will need to keep safety in mind when selling physical objects. That might mean tracking inventory to keep returns in quarantine until they can be resold, or instituting new processes for disinfecting and repackaging returned items.
Adapting In-Store Shopping Continues
Of course, many people will still shop in physical stores—but it might look a little different. As a result of fears of the virus, “I don’t think people are going to just go off to stores without planning and thinking,” said Howard Meitiner, Managing Director at Carl Marks Advisors and former president and CEO of Sephora USA, who referred to a “much more purposeful visit” and less browsing.
Customers are likely to do more online research beforehand, enabling retailers to analyze data about popular products and adjust inventory and regional availability accordingly. COVID concerns are also driving retailers to an omnichannel strategy that promotes greater safety as well as more convenience. Inventory data and data-driven workflows will be crucial for supporting BOPIS (buy online, pick-up in store) and curbside pickup options.
Retailers might also need to plan additional content around in-store safety protocols and processes. Especially for smaller stores, data around peak shopping times can inform messaging that helps customers plan their visit for less busy hours—another aspect of CX that can drive customer loyalty—or help stores execute systems for entry time slots to assure limited capacity and social distancing. Treasure Data’s CDP can help retailers pull and analyze this needed data quickly, support automated workflows, and deliver relevant communications, offering the agility to match changing customer needs this holiday season.
Getting Granular With Personalization
Historically retailers have used discounts to entice holiday shoppers to their brand. Insights into real-time financial data can help businesses ensure they hit the sweet spot between sales and revenue margins.
To really connect with customers this season, retailers need to provide products and messaging that are highly relevant to their needs. Especially crucial, says Brian Ruwadi, Senior Partner at McKinsey & Company, is “to understand who’s tried you for the first or second time and who has left you, and making sure you’re capitalizing on the new customers but also reaching out and pulling back in the customers that have left you and wandered to other brands over time.”
The greater insight into sales data that a CDP provides can help retailers monitor revenues and shift tactics as needed, as well as support personalized offers and related messaging to target specific customers. The access to accurate, robust data and the ability to manage it will be vital for retailers to succeed in a holiday season fraught with disruption and confusion.
Unwrap the Complexities of Holiday Shopping in 2020
While retailers and analysts are cautiously optimistic about the 2020 holiday season, the reality is, just like our other seasonal traditions, it will look significantly different than in years past. The ability to collect, organize, and act on omnichannel data related to customer profiles and inventory will enable retailers to quickly pivot to changing customer expectations and shopping habits.
Treasure Data’s CDP unifies offline and online customer data to support increasingly granular personalization, seamless customer service, automated workflows, and real-time inventory visibility that retailers need now and as we head into 2021. Make sure your store is ready for the holidays and the New Year: Request a demo today.
This post is part four of our 2020 Retail Holiday Guide. Click the links to read part one, part two, part three, and make sure to get our free 2020 Holiday Guide for Retail—it will help you plan for a successful 2021 too.