Four Tips for Successful Holiday Retailing
With fall well under way, most retailers are prepping for the most critical shopping period of the year—the holidays.
Holiday shopping preparations go well beyond just extending store hours and hiring more staff. Why? Because consumers today are educated, connected, and—let's face it—demanding. Now more than ever, consumers aren't just looking for a good deal, but rather a personalized shopping experience designed just for them.
In this digital environment, how can we find out what consumers want, offer them differentiated products and services, and create and maintain a powerfully positive brand image?
Here are some tips retailers should consider to ensure they survive this holiday season:
Be mobile like Santa. According to the IBM Online Retail Index, mobile sales in the second quarter this year made up nearly 20 percent of all retail online sales. With record highs in mobile usage, retailers need to take mobile seriously or risk ruining long-term user loyalty.
More advanced retailers are seizing the opportunity by not only making sure their sites are mobile-ready, but also ensuring consumers have a consistent experience wherever and whenever they interact with their brand. Remember, the primary interface for a mobile device is the fingertip. Web pages need to be simple and clean. Keep images to a minimum and make targets big, so they're easier for consumers to tap.
Know your customers. Consumers may be going mobile, but they're more likely than ever to "bounce" if they don't find exactly what they want, when they want it. Because they know that if they can't find something on your site, they'll find it elsewhere, consumers are spending less time on individual sites and viewing fewer pages. Average time on a site fell to just over five minutes this past quarter, down more than two minutes from a three-year high of 7:23 in August 2010, according to IBM's report.
This is a steady decline that's been going on for several years, but these days, consumer attention is hitting new lows. When people have unlimited information options across multiple channels, they don't have a lot of patience for a site with a bad user experience. And when they're gone, they're often gone for good.
To keep shoppers' attention, retailers need to more deeply understand the behavior of their own customers so they can create a more personalized experience tailored to their users' needs. Digital analytics, for example, can provide the insight necessary to offer personalized deals and recommendations for customers looking to buy more and spend more. With this information, retailers can set the right price in a way that's attractive to customers and still drive profits.
Make it personal. Loaded—but abandoned—shopping carts continue to plague online retailers. Nearly three out of four people who fill up a cart don't end up buying anything, research shows.
To cash in this holiday season, retailers should examine their checkout processes and overall online experiences to reduce clicks and make the buying process easier. Greater personalization in terms of product recommendations and offers can also lead to improved results.
Even when consumers aren't buying from their mobile devices, those devices are still a critical part of the shopping process as consumers research products. Therefore, retailers need to ensure that consumers' histories and shopping carts follow them from their mobile device to their laptop and back again.
Showrooming, by the way, is also here to stay, and leading retailers like Kohl's and Moosejaw Mountaineering are embracing it. They're leading the charge, improving their online and mobile shopping experiences and steering digitally savvy customers to not just research a product while in-store, but to actually buy.
Start holiday stocking. Retailers need to capture as many sales as possible without leaving themselves overburdened with stock at the end of the season. It's not too early to start planning how much safety stock you'll need on hand without having too much carrying costs so that your business can deliver products during the peak shopping periods.
It's important to optimize the location of the stock and means of transportation so that products get where they need to be in a quick and cost-effective manner. This means retailers need to form strong relationships with their transportation suppliers to ensure the carrier will provide capacity when space grows tight. This may include negotiating incremental pricing, for example, agreeing to pay higher rates during the holiday peak.
Now is also the time to integrate new suppliers and check for any risks in current supplier networks to make sure they can deliver products when demand spikes.
For retailers to survive and thrive this holiday season, it's all about personalization, mobile, and providing a stellar customer experience. Smart companies see holiday selling not so much as a traditional function of their organization but rather as an ever-evolving set of services they perform for their customers.
Jay Henderson is the strategy program director for cross channel marketing in IBM’s Enterprise Marketing Management group. His team is responsible for market analysis, customer insight, and industry marketing functions.
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