Among its multiple impacts, COVID-19 accelerated an elongation of the holiday shopping season that was already underway. Rather than being limited to a jam-packed four to five weeks from Black Friday to Christmas Eve, consumers are beginning their shopping as early as October (with a few doing so even earlier than that).
But despite the rush, retailers still have multiple opportunities to maximize both in-store sales and online conversions. The Retail TouchPoints 2022 Retail Strategy & Planning (#RSP22) webinar series, now available on-demand, offered a wealth of tips and best practices across critical areas including pricing, location-based technology, inventory management and marketplaces. The 18 sessions also charted the impact of fast-changing consumer trends with new research and offered real-world case studies and use cases to show these solutions in action.
Following are recaps of some of the most pertinent presentations. Registration is free, and of you already attended a live session when they aired Sept. 26-30, you’re automatically registered to listen to the entire series.
Mastercard Spending Data Reveals 4 Key Takeaways for Holiday 2022
The Mastercard SpendingPulse measures in-store and online retail sales across all forms of payment, providing a wealth of insights to help merchants refine and optimize their holiday strategies. During the session Fine-Tune Your Holiday Strategies With the Latest Spending Insights, Michael McNamara, Senior Principal for Mastercard SpendingPulse, and Emilie Kroner, EVP, Retail & Commerce at Mastercard, used key findings from the summer 2022 SpendingPulse to chart trends for the 2022 holiday season.
McNamara spotlighted a surge in promotional activities in July 2022 that marked the official kickoff of the back-to-school season. “There is likely to be a similar kickoff period in the middle of October where we could see a pretty significant surge in promotional activity,” McNamara explained. “If we hold to past patterns that should drive a pretty significant surge in retail sales activities, which could then increase growth rates earlier in the season.”
However, there are other dynamics at play that will impact seasonal results. McNamara and Kroner offered four strategic takeaways to help retailers hone their priorities:
- Be prepared for moderation in spending: Inflationary pressures mean consumers will be bargain-hunting and promotion-seeking, which means retailers will need to spread their deals and offers across an elongated season. “This means a shift in promotional calendars,” noted Kroner, “and a bounce back to some promotional events we saw prior to the COVID period that are going to be core components of what happens this holiday season.” In fact, McNamara noted that Mastercard predicts a comeback for Black Friday 2022, with total sales exceeding 2019 results.
- Take note of category demands: While the Mastercard SpendingPulse revealed moderate growth across categories, electronics, apparel and luxury (excluding jewelry) are likely to have the most significant year-over-year gains. The return to offices and social events is inspiring consumers to level up their wardrobes and focus more on apparel and footwear. This will create a significant opportunity for specialty apparel retailers, which are predicted to see 4.6% YOY growth this holiday season, whereas department stores will only see a 0.3% increase.
- Focus on bringing people back to stores: In-store retail sales are expected to increase 7.9% this holiday season compared to 2021, and McNamara cited consumer demand for more deals and promotions as a likely reason. Retailers can use doorbusters and exclusive in-store sales to drive people to stores and, most of all, inspire a last-minute surge after ecommerce shipping deadlines pass in mid-December.
- Prepare your stores for the elongated holiday: While this certainly means equipping your store teams to operate at peak performance, Kroner noted that retailers will need to ensure locations are stocked with must-have items (gifts and personal purchases) to capitalize on the new trends of the season. Additionally, retailers will need to consider how they merchandise and promote discounted inventory they hope to clear by the end of the season.
How Farfetch Boosted Customer Satisfaction 25% with Customer-Centric AI
It’s common retail wisdom that it costs 5X more to acquire new customers than keep existing ones, and one of retailers’ primary tools for maintaining customer relationships are their contact centers.
“Retailers have two things to deliver — great products and stellar service,” said Shannon Flanagan, VP Strategy for Retail at Talkdesk in the session How to Equip Your Contact Center to do More with Less. “Differentiating on product and price has become harder and harder. But humans also don’t just shop with their heads and their wallets, they shop with their hearts. Customer service, digital experience, personalization and other factors drive that emotional loyalty.”
However, as the customer journey has gotten more complex, the role of customer service agents has also gotten harder. Add to that the fact that research indicates the bulk of consumers (81%) would prefer to try to resolve issues on their own first, and the case for AI-supported customer service systems becomes clear.
Online luxury fashion retailer Farfetch has experienced huge growth over the past couple of years, but was struggling to maintain its service levels in pace with that expansion. The retailer decided to automate specific parts of its contact center operations and employed AI to aid agents in resolving customers issues quickly. The result has been a 25% increase in customer satisfaction paired with a 50% reduction in resolution time. Additionally, the retailer is now able to quickly replicate its contact centers in new countries it enters.
Harness the Power of Location to Deliver Contextual Shopping Experiences
During the holiday season, consumers are particularly strapped for time and resources. Luckily, retailers can harness the power of location to make their mobile applications and, in turn, their brand experiences, more seamless than ever. During the session Location-Based Solutions: A Holiday Season Must-Have for Retailers, Nick Patrick, Founder and CEO of Radar, revealed three ways retailers can use location-based technology to maximize revenue results:
- Order ahead and pickup: Retailers can enhance BOPIS and curbside pickup offerings with live customer ETAs and arrival detection. At a time when traffic spikes are common and workers may be in short supply, location-based solutions can help specific stores be more efficient and effective. Retailers that invest in the fulfillment experience can set a foundation for growth: Since launching Radar for order ahead and pickup and location-aware experiences, American Eagle saw a 35% lift in digital revenue.
- Location-based marketing: Consumers are clamoring for more personalized experiences, and location-based solutions help brands roll out more contextual mobile app promotions and messages. As consumers hustle to check off their holiday shopping lists while they navigate product stockouts and higher prices, location-based marketing tactics help ensure shoppers get the best deals, especially when they’re in stores. For example, JOANN achieved a 7X ROI by using Radar to surface a free shipping coupon for in-store app users.
- Location-aware experiences: Like location-based marketing strategies, location-aware experiences display in-app features, such as store locators or order-ahead functionality, that augment customers’ experiences in retail stores to increase loyalty and engagement.
Don’t Overspend on Real-Time Inventory Update Frequency
The advantages of real-time inventory data are obvious — continuously ensuring the right products are in the right stores and on the right shelves maximizes sales potential and minimizes friction for consumers. However, enabling this level of transparency can be expensive, and retailers need to be cognizant of how in-depth they really need to go. Even less frequent updates can be a valuable tool, according to Jason Wolf, Director of Consulting at Sunrise Technologies, speaking during the session, How Inventory Visibility Can Tame Retailers’ Toughest Pains.
“If your data’s not up-to-date enough to jump on a trend, you’re missing out on opportunities to prevent lost sales and disappointed customers,” said Wolf. “I will say real-time information is relative and it should be carefully considered. Often, a real-time inventory picture of every 15 minutes, or even an hour, is sufficient for most retailers. And placing true real-time inventory into an integrated system can create significant overhead that can often overshadow the advantage of having true real-time updates.”
Less frequent updates can be combined with demand forecasting tools to boost sales without hurting the bottom line. Together, these tools can optimize inventory to improve turnover and keep shelves fully stocked with relevant, fast-selling items.
Dynamic Pricing is For Everyone, Not Just the Big Players
Implementing dynamic pricing can seem like an intimidating option, but it’s a valuable tool for combatting inflation and backed-up inventory. Any retailer can take advantage of the technology in any channel, provided they are willing to start small and ensure they align use cases to strategic goals and outcomes.
“People tend to think of agile pricing as something that’s really only done by the tier one retailers, but it is something that can be implemented by small- and medium-sized retailers,” said Brother Mobile Solutions’ Mike Lowey during the session Tactics for Tackling Omnichannel Challenges: Dynamic Pricing, Returns and Beyond. “We tend to think of agile pricing as something done on the website. It can be done in-store, it can be done by SMB retailers — but it does take some practice.”
Lowey advised retailers to start by identifying specific products that would benefit from dynamic pricing rather than immediately implementing the technology inventory-wide. Retailers can start by “identifying triggers in the marketplace” as a sign that the option will pay off, such as by keeping an eye on competitors’ pricing, understanding the velocity of a given SKU’s price and collecting feedback from customers.
Leverage Alternate Revenue Streams to Support Business Growth
Rising inflation, supply chain issues and reduced consumer spending continue to plague retail ahead of the holidays. During the session A Dual Path to Growth: Boost Business Efficiencies, Develop Alternate Revenue Streams, Kevin Flynn, Global Retail Lead at Stripe, revealed that among retailers:
- 56% are accelerating responses to business and environmental shifts;
- 55% are open to improving their innovation capabilities; and
- 51% want to adopt new business models.
Unfortunately, many retailers are hindered by outdated tech stacks and uncertainty regarding where to begin changing. Flynn, however, remains optimistic, and revealed 10 key value drivers from the payments area that can support sustainable growth beyond the holidays.
“You can take your existing core business and optimize it to improve your business results, and the second part is looking outside at the adjacent additional revenue streams that you can incorporate into your model to drive the top line,” said Flynn. “There is an awful lot about what you can do to improve customer experience, remove unnecessary friction and build out intuitive experiences that will also help you critically increase conversion, which in turn increases revenue optimization.”