Despite a troubling job market and looming election, according to a report from Deloitte, sales this season in the US are expected to grow between 1% and 1.5%1.This push is expected to be driven by increased spending from high-income households with fewer avenues for consumption, now that experiential spending on dining and travel have been curtailed2. Wealthy households are expected to have an impact of between 2.5% and 3% growth on sales.
It’s less about the 4Ps of marketing – product, price, place and promotion – when targeting online shoppers. One analyst called the new strategies “prepare, perceive and then pursue”3. During the course of this year, it has been proven that retailers that already had invested in omnichannel capabilities were better equipped to pivot to the change in customer shopping habits. This meant providing full omnichannel capabilities, like curbside delivery to accommodate the current conditions. However, there are a few things to keep in mind about approaching and marketing this season in particular.
A Longer Season
Getting into the holiday spirit early is going to be the mantra of most people. Analysts expected that the holiday season would be extended this year and start early October4. Amazon’s Prime Shopping Day that took place October 13-14 – pushed back from its usual July dates – kicked off the season, though other retail brands such as Target, Walmart and Best Buy were offering deals in advance of that. Amazon said its independent third-party sellers alone clocked up US$3.5 billion worth of sales, an increase of 60% from last year’s Prime Day5. Retailers and logistics partners are also pushing for shoppers to start their shopping early to avoid last minute delivery issues, while many shops are closed on Thanksgiving Day, making Black Friday less of a landmark date than it has been previously.
Logistics, Last-Mile and Fulfillment
With an increase in online shopping comes added strain on the logistics industry. Salesforce believes that shipping surcharges will be imposed between November 15 and January 15 globally6. Retailers are beefing up their call centers and warehouses with more workers, investing in additional warehouse space to accommodate extra stock or converting brick and mortar locations to serve as delivery centers. Others such as Target, Staples and Walmart have partnered with solutions like Shipt, Instacart and Postmates to offer same day delivery. Others are preparing to be able to handle an influx of orders7. Logistics companies are recommending that shipping cut-offs for a delivery by Christmas Eve be brought forward to an earlier date. Keeping the last-minute rush in mind, retailers such as Macy’s are talking about keeping in-store and curbside pickups and returns to bolster online shopping in case of shipping bottlenecks8.
The nature of gift-giving is also expected to change with more people gathering online or virtually. Even if they meet in person, the groups are expected to be smaller than usual. The nature of gifts exchanged are expected to change with fewer people gifting experiences and more practical and useful gifts, especially those that support the stay-at-home lifestyle such as consumer technology. Always popular, gift cards are expected to be featured prominently on shopping lists this year as well.
Clear Communications and Engagement Strategies
Morning Consult’s research has revealed that Americans are more likely to buy from brands whose ads are realistic or optimistic and explain how they’re keeping shoppers safe or provide gift ideas9. Even in stores, not just the adoption of Covid-19 health precautions to keep customers and employees safe but good signposting about them is key to allay customer fears.
Managing customer expectations through clear communications about delivery options, status and timelines are crucial to retaining customers and building loyalty10. Aside from contactless mobile wallet transactions to allow for reduced contact between employees and customers, SMS texting and push notifications from retail apps at various touch points in the customer journey are key to building customer relationships11. Bloomreach advises retailers to ensure that product discovery and personalization are used to help customers find fun and interesting gifts, while making product availability clear to view while searching and browsing12.
Retailers can leverage online advertising to reach their customers and direct them either to their online or brick and mortar stores. Data from Zenreach shows that click-through rates for online advertising are at 2-3%, about 20-30 times pre-COVID13.
There’s one caveat though, the increased numbers of shoppers online is bringing with it online shopping scams, thereby shining a light on site security.
Even if dogged by uncertainty, the shopping season has gotten off to a great start this year, and these tips above can help retailers deploy ‘prepare, perceive and pursue’ strategies so that they and their customers both have a happy holiday.
3. Holiday shopping 2020: the three P’s for retailers, Kearney.com
7. Nearly a third of 2020 US holiday sales will occur online, Salesforce forecasts, DigitalCommerce360
8. Macy’s prepares for a holiday season like no other, CNBC.com
9. How COVID-19 is Changing the Holiday Shopping Season, morningconsult.com.
10. 2020 Holiday Retail Forecasts and Predictions, Retail Info Systems
11. In a COVID-19 world, holiday shopping is all about mobile engagement, Campaignlive.com