This holiday season, shopping streets will be quiet, and traditional shopping habits will no longer take place in physical stores. The pandemic has changed virtually everything about the 2020 holiday shopping season. Among all the disruption and unprecedented challenges, there could be a massive opportunity to turn the crisis around for business. The pressure is on for retailers to get this season right.
Some retailers will thrive this holiday season and for others, it will be quite the opposite experience. The determining factor will depend on retailers' ability to rethink the consumer experience, strengthen fulfillment capacity, and make adjustments to long term strategies.
The pandemic has increased consumer appetite for options to choose from. It has introduced unpredictable and fundamental shifts in consumer behavior which leaves this year’s holiday shopping season up for grabs.
According to research by Mckinsey and Company, more than 60% of global consumers have changed their shopping habits, and these habits are here to stay. A recent study shows that consumer footfall could fall precipitously, suggesting up to three-quarters of UK consumers are avoiding in-store shopping this year.
The pandemic only accelerated the inevitable shift from consumers opting for offline shopping to being comfortable online shopping. According to a ThinkWithGoogle report, over 70% of U.K. shoppers who plan to shop this season said they would be shopping online. Retailers are scrambling to meet their customer's demands and keep up with the surge in e-commerce shopping trends.
The customer experience will be the key for retailers during this holiday season. Retailers must drive personalization and engagement tactics to resonate with their current audience and win new customers. In a SalesForce 2019 Connected Shoppers Report, shoppers admitted that they appreciate their most-loved brands ‘catering to their unique needs.’ And in another 2019 State of the Connected Customer survey, 69% of respondents said they expect brands to ‘understand their needs and expectations’. Consumers do plan to spend less this holiday season, but they will overspend on blockbuster holidays such as Black Friday.
Retailers who will come out of this season successful are not necessarily those with the largest online footprint, but those who effectively managed data and their logistics operations. There are three areas retailers will need to double down on in order to overcome holiday shopping logistical challenges.
1. Rethink the Customer Experience
The battle for customers this season will be waged online, exclusively. This will require careful attention to customer acquisition strategies including communication, data management, etc. Listening and understanding your customers will be the key to success this season.
2. Strengthen fulfillment capacity
Logistics is emerging as a competitive weapon for retailers. This holiday season, retailers must include home delivery or contactless pickup options for their end-users to ensure that their needs are met and sensitive to the current landscape. Implementing logistics around these operations is crucial to managing peaks. For some companies, this may require creating new partnerships with delivery service providers. For others, it may mean reducing per unit picking and shipping costs or developing an entirely new fulfillment process.
3. Planning for the Long Term
While it makes sense to operate in the short term to make it out of holiday crunch time, smart retailers are aligning their activities now with their long term plans to make sure there is enough cash, inventory, and resources to outlast the ramifications of the pandemic.