While most retailers should have their holiday strategies in place and ready to kick off at a moment’s notice, there still may be some leeway for last-minute adjustments based on day-to-day data or changing market conditions.
Pricing is a good example of a strategy that might be re-evaluated on an as-needed basis, throughout the season. In fact, as late as October 17 Target announced a strategy to match competitors online prices during the 2012 holiday season, including Amazon, Wal-Mart, Best Buy and Toys 'R' Us, as well as their own Target online prices.
Previously Best Buy was the online retailer to implement that strategy. As of the same time in October, Wal-Mart and Toys 'R' Us are only matching local competitors’ print ads.
Customer service also should be reviewed regularly during the season. Retailers must be prepared to provide shoppers with excellent customer service, noted Pam Goodfellow, Consumer Insights Director for BIGinsight. “It’s about tapping into consumers’ needs to bring up sales rather than drop prices; The overlying theme of this holiday shopping season is still going to be a cautious time. Consumers still are going to be aware of prices, but they want to make it a nice holiday. They’re not just trying to find the lowest prices; it’s also about finding a quality component.”
She added: “Since 2008, consumers have embraced smart shopping strategies. We’ll see a lot of price comparing and matching; it is all about saving money, and consumers will save money wherever and whenever they can.”
Mobile Impacts Holiday Strategies
The most significant consumer trend this holiday season is going to be mainstream use of mobile phones while people are shopping, noted Alison Paul, Chief Economist for Deloitte. “Everything from locating a store to locating a product or clothing item, or even accessing the store Wi-Fi for price comparison and more information on the product,” she noted. “It’s not so much about using your mobile phone to shop, recent Deloitte mobile studies indicate consumers are utilizing their mobile phones in several points of the shopping experience — from planning through deciding to checking out. Consumers who use a mobile phone while they are shopping are 14% more likely to make an in-store purchase than those who do not use the device.”
She added: “Mobile is a huge influencer for consumers. Last year, retailers were trying to decide whether or not they wanted to get into mobile, and should they outfit their stores with WiFi. This year, retailers are getting onboard, and mobile is going to be a mainstream part of the overall communication with consumers.”
To help retailers better engage with consumers via their smartphone and tablets, retailers need to understand that they have consumers in their stores, and the primary device they are using to access more information is mobile, according to Mike Wehrs, CEO and President of ScanLife. “Consumers aren’t just researching prices, they are also looking up the manufacturer, different product functions as well as peer reviews. In general, consumers are looking for reasons to justify their purchase.”
To interact with consumers via mobile devices, Wehrs suggests retailers consider these three strategies:
Send consumers SMS text messages with short codes;
Offer a URL for consumers to type into their web browser; and
Add quick response (QR) codes to products.
ScanLife helps retailers meet these goals by providing the capability to share content with consumers, such as frequently asked questions (FAQs), the origin of the product, and video. “We offer the analytics based on the number of times the product has been scanned by shoppers based on the time and location,” said Wehrs. “This breakdown helps retailers understand ways to invest their marketing budget...this allows the retailer to have a direct, one-to-one relationship with the customer when they are in the mode to be shopping or researching products. We can offer [retailers] information about the potential shopper based on their demographics, as well as the peak hours.”
Personalization And Video Techniques Grab Attention
As consumers continue to seek information on products across channels this holiday season, retailers plan to offer a variety of engagement options through video.
“Some retailers are modifying the look and feel of product videos to deliver a more ‘blinded’ holiday experience — where the video setting appeals to the holiday season, with snow following instead of sunshine,” Jim Dicso, President of SundaySky told Retail TouchPoints. “Moreover, retailers are adding engagement strategies that are tied to their approach for promotions and value ads.”
Dicso added: “Communicating the value proposition in the form of a video aside from the product or promotion of the product you are considering is going to be more effective than it being documented in an image or through text in an email. Video is a more engaging mechanism to communicate the concept.”
SundaySky has noted three distinct video trends in retail:
Personalization is coming to the forefront.
The notion of video enabling a product catalogue is still something that customers are interested in for the purpose of improving engagement with web site visitors, as well as improving the conversion rate of those visitors.
Companies plan to leverage captured data from their customers, such as past purchases, to help create a personalized experience.
“Online video is quickly surpassing television,” Brooke Christian, SVP of Sales at TransPerfect, a provider of international multilingual translation and interpreting services told Retail TouchPoints. “Microsoft media experts predict that more than 220 million people will watch video on their PCs or mobile devices instead of television sets by 2014.”
To help global retailers reach engagement goals, retailers should they provide in-store point-of-sale (POS) demo videos as well as ad spots to reach customers in international markets, said Christian. “These videos must be properly translated and localized to ensure campaign concepts and company slogans are consistent throughout different cultures.”
Social Engagement Pays Off Across Borders
One overarching best practice for all online content is to be to deliver localized messages to shoppers, according to Christian. “‘Holiday’ has different meanings for different consumer groups,” he said. “Your web site, social media presence, videos, mobile sites or apps, and advertising campaigns should recognize those differences. Brands who want to achieve a loyal following in these markets must carefully consider local habits and offer translated and localized online content, with careful consideration for local habits.”
Additionally, Christian noted, retailers should consider social media as an important part of a globalization campaign. “Since social media requires ongoing engagement, relying completely on machine translation is not wise,” he added. “Retailers must adapt messaging to regional cultural norms and search engine parameters — this will achieve the highest levels of customer engagement.”
Paul also noted the growing impact of social media on customer engagement throughout the holiday shopping season. “Consumers are using social channels to research items, read testimonials and referrals, and search for wish lists,” she said. “With time, we’re going to see more retailers investing in social analytics to listen and sense where consumers are responding to promotions, and are unhappy with customer service. Forward-thinking retailers are beginning to build capabilities around using social media as the next version of the ‘1-800 number;’ Social media is another feedback loop that helps retailers understand what works in terms of engaging with consumers.”
How Will Early Shopping Affect Overall Sales?
Consumers seem to start shopping for the holidays earlier and earlier each year, possibly motivated by retailers’ early holiday offers and promotions. “We’re finding that consumers are starting their shopping earlier than ever this year — whether it’s before or after 9pm,” stated Manish Chowdhary, Founder of GoECart, provider of multichannel e-Commerce solutions. “Every Monday is going to be like a Cyber Monday throughout November and December.”
“Retailers already are feeling the effects of early holiday shopping,” noted a recent twincities.com article. “Toys ‘R’ Us stopped accepting reservations because of high demand last month for the Tabeo tablet and Wii U game console as part of its new hot-toy holiday reservations list, which allows consumers to reserve popular items for later in the season,” the article reported.
The twincities.com article also noted that “Wal-Mart told investors last week that the company has already lined up $400 million in early holiday layaway sales in its program that launched a month earlier than last year. That is more than half the amount that shoppers put on hold in layaway at Walmart during all of last year's holiday season. Top items so far include 50-inch televisions, Apple's iPad tablet and trampolines.”
Deloitte Offers Holiday Tips For Retailers
This year’s holiday season has five weekends, which will be helpful to retailers, noted Paul. With that longer selling period in mind, “The big challenge in retailing is knowing when to markdown,” she noted. “There are more and more tools and data available to retailers to more precisely markdown so they do not have to give the store away to get the in-store traffic.”
Paul also suggested that retailers decompose their promotion cycle and look into their pricing by store, item and category, making more precise decisions on when and how deeply to markdown. “Retailers need to give a good price and value impression without giving away the margin before the holidays come to an end,” she said. “Panic is not a good strategy. Today, the tools and technology available are affordable for retailers — whether it’s the sophisticated algorithms built into software. These tools don’t take away the decision-making out of the hands of the retailer; these tools actually help them be more precise; there is a way to build a price impression that will bring shoppers through the doors while still recouping profits.”
She added: “As the we move away from the recession of 2008 and 2009, consumers become more comfortable with spending through their credit cards and splurging a bit, and that’s all good news for both the economy and the retailers as well as the consumers. It’s not going to be the go-go 90’s for a while, if ever again. I think this is a bit of a new normal. However, when it comes to the holiday season, consumers are still going to shop, and as they get further away from the 2008 and 2009 recession, they will become more confident with their spending habits.”