How Retail Leaders Are Preparing for the 2020 Holiday Season
The 2020 holiday season will be extremely different than any other year for retailers and consumers alike. Despite these differences — including a rapid shift to ecommerce, reduced consumer spending power and overall uncertainty in the market — the holiday season will remain critical to the success of retailers of all kinds. In fact, success during the holiday season may be even more important this year than ever before as many retailers try to make up for lost revenue from the first half of the year.
To better understand how retailers are preparing for success this holiday season, we turned to industry leaders. Specifically, we surveyed executives at top brands and retail agencies, including Hammacher Schlemmer, AlchemyWorx, Blue Moon Digital, Criteo and Shaw/Scott. Here’s what we learned.
Personalization & Meaningful Connections Will Help Retailers Stand Out Among Heightened Competition
It’s easy to equate the holiday season with discounts, but when it comes to standing out among the competition and growing customer loyalty — especially in such uncertain times — meaningful, personalized connections can prove extremely powerful.
According to Ann Marie Resnick, VP of Marketing at Hammacher Schlemmer: “Hammacher is preparing for Holiday 2020 now – we are constantly meeting to discuss marketing spend, merchandise selection and inventory decisions. We have successfully weathered the pandemic by meeting our customers where their needs are. We will continue to follow this trend and stay in tune with our customers going into the holiday season. More and more we will rely on AI to help us understand the behavior of our customers on our site. We are reading all customer mail, diving into reviews and analyzing the buying patterns of our house file as well as our new-to-file customers.
It is important to keep the brand in front of the customer, not to overwhelm them, but to guarantee we have what they need, when they need it (and at the right value!). There is still a lot of uncertainty out there – it is clear that we need to continually reinforce that this brand is a brand that customers can rely on just like they always have in our 172 year history.”
Tim Rogers, SVP, CRM and Omnichannel at Criteo, echoes the importance of this type of meaningful connection. He advises retailers: “Focus on what really matters right now—health and safety, for both workers and customers. Then think about how to communicate about your efforts to help build trust and confidence with consumers. Additionally, work with a partner that can help you connect store customer journeys to online behaviors. With these steps, you’ll be in much better shape to create impactful touch points and maximize market share with holiday shoppers throughout the season.”
Early Preparation, Especially for New Digital Channels, Will Help Improve Agility & Maximize Reach
Staying agile to handle the unexpected will be especially important this holiday season. Achieving that agility requires the right technology and processes as well as heavy preparation. This type of advanced preparation will also help maximize reach, particularly as your marketing team branches out to new digital channels.
As Cindy Brown, CEO at Blue Moon Digital, puts it: “Most importantly, try to over prepare so you can quickly adjust if you need to shift budgets, promotions or featured products. If possible, have creative options that could reflect different consumer sentiment, weather conditions and economic conditions. We also suggest doing a trial run of some of the promotions for holiday 2020 during Prime Day to see what product categories and promotions resonate with your target audience.
Finally, now is the perfect time to accelerate your digital transformation. Get the kinks worked out in your click to curb delivery, in-store pick up and return to store. Consider digital channels that you aren’t in currently by testing areas like TikTok, SMS and new affiliates.”
TJ Hunter, VP, Strategy and Analytics at Shaw/Scott, agrees that this type of early preparation is important when getting ready for what’s sure to be a holiday season unlike any other. “Holiday 2020 will be anything but ‘business as usual’ for retailers. Now, more than ever, retailers should be pivoting to prepare. Even before COVID-19, physical store foot traffic was waning year-over-year as consumer behavior organically shifted online. ‘Doorbuster foot traffic’ and long mystery item shopping lines are a thing of the past. In 2019, Black Friday in-store traffic was down 4.4% year over year. There’s been a simultaneous uptick in online shopping.
The COVID-19 pandemic and social distancing guidelines have ignited online purchase behavior—now the default product discovery method for most US consumers. 2020 will likely be the largest digital commerce year on record. Are you poised to capture digital audiences ahead of the holiday period? Are you in tune with messaging strategies for new customer segments shopping online? Many companies are taking the time to rigorously conduct pre- and post-COVID analyses to understand their customer cohorts, behaviors and new product purchase trends. It will then be important to use these insights to shape your brand message, acquisition, engagement and retention strategies during this holiday season.”
Meanwhile, Rob Varon, Head of Business Development at AlchemyWorx, touts the importance of also preparing consumers for the holiday season. Specifically, he recommends thinking about Black Friday/Cyber Monday as a month-long event. “This does not mean mailing your best offer(s) for the entire month, but rather coming up with a plan to maximize the value of each subscriber. Early in November, we want to get subscribers used to opening emails. Through our research, we know that ‘Thank You Sales’ or ‘Letter from the President’ campaigns do a great job increasing the number of opens. After reminding people of the brand in early November, we want to get them accustomed to clicking emails and going to the website. In mid-November, we often run a ‘Mystery Sale’ that requires subscribers to click on the email to find out what their offer is. On Black Friday, when subscribers are getting emails from all of their mailing lists, retailers who did that month-long preparation stick out because their subscribers have already gone through the buyer’s funnel within the last month.”
Measuring Results Will Remain Important, But the Success Measures Will Likely Change
Finally, it’s important to note the success measures for this holiday season will likely be quite different compared to previous years. While that change is okay given the unusual nature of this year, it doesn’t mean that measuring results should fall by the wayside. Quite the opposite, measuring key outcomes and angling toward growth throughout the holiday season will be critical to understanding how to best position your brand for success in 2021 and beyond.
Tim Rogers, SVP, CRM and Omnichannel at Criteo, sees loyalty as an important success measure for this year. “Growth will remain important during the holidays, but omnichannel retailers should make sure they’re engaging with their existing customer base even more in 2020 to drive loyalty and revenue. This is especially important given that the pandemic influenced many people to purchase from companies they hadn’t previously considered. Creating and communicating positive, safe experiences—both online and offline—will inspire confidence from your core audience and encourage them to keep shopping with you well past New Year’s.”
For Cindy Brown, CEO at Blue Moon Digital, setting expectations is essential. Though she notes that year-over-year growth in certain areas may be a struggle this holiday season, she believes the most advanced retailers will find opportunities to drive growth in other areas. She says: “Traditionally, total revenue, total shipped, gross margin and year-over-year growth are the measures for success. We predict it will be much different this year. It is going to be a struggle to grow revenue over last year. There are too many unemployed and cautious shoppers. Instead of using your traditional measures of success, focus on improvements in conversion rates and growth in digital.
Assuming that there will be less shoppers, focus on the shoppers that are coming to your site and making it really easy for them to find products while streamlining the overall shopping experience. Test now to optimize site performance. An increase in conversion rate from a 2.20% to 2.64% is a 20% improvement. So if your site traffic is down 8% from last year, but your conversion rate is up 20% (and if your average order value doesn’t drop more than 8%) you should be able to show modest revenue growth.”
Are You Ready for the 2020 Holiday Season?
The 2020 holiday season will be different than previous years, but it still represents an important opportunity for retailers to grow revenue by attracting new customers and growing loyalty among existing ones.
The key to success will be preparing your brand to stay agile and take action on data in real-time to engage shoppers at a 1:1 level across channels. Click here to learn more about what it takes and how to get started.
