‘Tis the season to be jolly’ for marketers. I recently had the opportunity to discuss 2018's Holiday Retail Outlook with my colleagues from Alliance Data, Alliance Data's card services business, Conversant and LoyaltyOne. We all agreed, as retailers are planning for the hustle and bustle of the upcoming holiday season, the future looks merry and bright. The National Retail Federation forecasts that retail sales will increase between 3.8 percent and 4.4 percent in 2018 and, it’s predicted that 40 percent of annual sales targets will come from holiday sales. So how can you ensure you meet your sales targets and beyond? Consider these tips:
- Think customer first: The customer is the most important channel and it’s the biggest opportunity for personalization. In a recent study conducted by Epsilon, we learned that 80 percent of consumers are more likely to do business with companies who offer a personalized experience. Last year, Nordstrom was a leading brand who enabled customer centered journeys. They focused on the hassle of holiday shopping by offering customers conveniences across all channels, including reserve online, try on in store, free gift boxing, buy online, pick up in store, last-minute alterations, free shipping and returns, and curbside pickup.
- Mobile is the first ‘stop’ on the path to purchase: With 90 percent of consumers owning a smartphone, clearly mobile plays a significant role in the purchase cycle for holiday shoppers. Think of mobile as the ‘first stop’ where consumers go when they want to make a purchase. Consumers leverage their mobile devices to research holiday gift ideas, read reviews of the ‘latest and greatest’ tech gift, review the best wrapping ideas while they are waiting for their child to be done with practice. Mobile is easy, fast and convenient and provides consumers with instant gratification to fulfill their shopping needs that are ‘in the moment’. As marketers, we need to think about how mobile is influencing the shopping pattern.
- Loyalty programs are a key influencer: For holiday 2018, loyalty programs are going to play a larger role in terms of influencing where people are going to shop. Retailers need to leverage their loyalty program data to ‘cut through the clutter’ and customize their communications and offerings to make it personalized and relevant to each individual consumer. A one size fits all discounting strategy is a thing of the past. Consumers love to both use their loyalty rewards during the holiday and earn additional rewards. Think about the offers you can add to your loyalty program promotions – such as 2X or 3X the rewards for purchase. This additional incentive creates the shopping behavior of wanting to make additional purchases. And don’t forget about the emotion of the holiday. Capitalize on it and make sure you’re providing rewards and experiences that appeal to both the heart and mind. In doing so, you will be able to extend the relationship beyond just the holiday season and inspire true, authentic loyalty.
- Don’t dismiss the power of human interaction: Almost 90 percent of sales happen in store. Why? Because consumers love the interaction with the sales associate – a human. Sure, the in-store purchase is influenced by digital channels (research, price and product reviews, etc.), however, consumers still yearn for the in-store experience. They want human recognition and a personal experience. For example, clienteling is a technique that several retailers leverage (Coach for example) in which sales associates use to establish and encourage long-term relationships with key customers both in person and between retail visits — it’s based on data about customer preferences, behaviors and purchases.
Remember, holiday is a sprint, not a marathon. The tips ‘keep giving’: Bring your brand alive this holiday season and think about how artificial intelligence plays a role; Don’t get bogged down with technical glitches – they can be a real set back; consider new ‘free offers’ such as gift wrapping – while free shipping is great, it’s also a ‘thing of the past’; promote offers that capture the magic of the holiday and make it special. As my colleague shared, Wayne Gretzky said, “always skate to where the puck is going to be, not to where it has been.” Think about how this relates to your retail brand and your loyalty program.
For more information, download the 2018 Holiday Retail Outlook.