Holiday Store Wars: Mobile Awakens

1/26/2016
For years on Thanksgiving night, many retailers offered a very limited-supply doorbuster special of highly sought-after electronics at an incredible discount. This was their trusty recipe for success. Crowds would clamor to line up to secure this coveted doorbuster -- if the item was still in stock -- and then spend much more once they made it in store.

Dating as far back as the 1980s, the retail phenomenon known as Black Friday became a time-honored family tradition and a media spectacle, an excuse to sneak out of Thanksgiving dinner and go shopping. Long lines would snake around store entrances and well into parking lots as crowds gathered, all filmed just in time for the 10 o'clock news.

But this past holiday season, the consumer may have finally wisened up to Black Friday's bait and switch. A whopping 10.4 percent of shoppers who braved the crowds in 2014 avoided stores this year, instead opting to phone it in.

And phone it in they did. For the first time ever, more shoppers turned to their smartphones than to physical stores on Black Friday. Why the drop in store visits? Likely several factors, among them: shoppers wanting to avoid the harried crowds, better deals available online, and simply the fact that 40 percent of holiday shoppers wait to do their shopping until the final 10 days before Christmas. Store visits on "Super Saturday," the Saturday before Christmas, outpaced "Black Friday" for the first time ever this year.

Perhaps it comes as no surprise, then, that Black Friday wasn't the only major disruption this holiday shopping season. While we wait for data analysts to crunch the final numbers, we can take stock of 2015's major moments -- mobile domination, diminishing Black Friday, and shipping and fulfillment, to name a few. Because as retailers know all too well, it's never too early to begin thinking about next season.

So how can retailers leverage this year's go-to platform to boost in-store sales? Proximity technology such as beacons and RFID within the brick-and-mortar environment can transform a store's square footage into an interactive selling machine, by tagging all products with RFID to trigger endless aisle experiences or mobile offers based on the shopper's proximity to a beacon.

Proximity technologies have the power to take the best of online -- deep product information, user reviews, "works well with..." recommendations, and more -- into the real world to help shoppers self-sell. And brick and mortar still holds a prime advantage over e-commerce: items discovered during the course of a shopping trip do not require shipping or handling. Instead, they are right there in the store, ready to be purchased and walk out the door with the shopper.

Contrary to popular belief, dwindling Black Friday crowds by no means signals the end of brick-and-mortar retail. This holiday season, it was actually e-commerce that began showing some wear and tear. The rise in mobile purchases tipped the scales, causing fulfillment systems to strain under the pressure of heavy usage.

While mobile was the channel of choice for transactions this holiday season, brick and mortar took center stage when it came to fulfillment. Whether shopping in-store or via the omnichannel buy online pick-up in store (BOPIS) options, the physical store served dually as sales floor and online order fulfillment center.

In-store pickup was not without its challenges, either, as a whopping 60 percent of purchases across the industry experienced errors. In my experience, retailers would be wise to identify and resolve BOPIS problems before the 2016 holiday season. After ordering a product online at a major retailer and selecting in-store pick-up, the credit card I used to place the order was stolen. But, as is standard industry practice, the retailer requires the credit card used to place the order be shown in-store at pick up. Left in a Catch-22 where the item could not be picked up in-store nor rerouted to be shipped to be home, my holiday socks are forever stuck in BOPIS-limbo, awaiting a pickup that will never come.

While a relative newcomer to the omnichannel scene, BOPIS fulfillment is a customer-facing touchpoint that should not be overlooked. Once in-store, BOPIS shoppers are two times more likely to spend more than non-BOPIS shoppers. Across the board, the biggest challenge facing retailers in BOPIS fulfillment is communicating updates when consumers want them. A dedicated CRM -- one that is isolated from other business operations -- is a best practice when it comes to ensuring a retailer's back-of-the-house is agile enough to handle fulfillment. Smart retailers that focus on streamlining the BOPIS process can really move the needle in 2016 with a great deal of room for improvement.

The sorest spot for e-commerce this holiday season? Shipping. At the start of the holiday season, UPS and FedEx, sensing trouble, warned shoppers of looming delivery delays. As predicted, UPS on-time deliveries fell by 7 percent from 2014 to 2015. The shipping crush was so voluminous that the U.S. Postal Service was forced to expand their delivery fleet via rental trucks -- in turn leading to a rental truck shortage.

Retailers looking to dip their toes into omnichannel should be leery of quick sidesteps like turning their e-commerce engine into the central authority to transact, fulfill and track in-store inventory. Jumping in without a sound enterprise omnichannel system can quickly lead to disaster if an outage occurs -- bringing down the in-store POS and all inventory tracking in-store or online. Segmenting the commerce engine so that portions of the website, mobile and in-store operate independently is key to protecting against massive outages.


Jonathan Spooner is a retail strategist at Intersection, a technology and media company committed to transforming customer, visitor, and employee experiences in shared and urban spaces. With more than 20 years experience pioneering the retail media marketplace in consumer-facing touchpoints both online and offline, Spooner has worked on award-winning initiatives for brands, agencies and retailers. He speaks frequently on retail technology innovation, and his insight has been featured in the New York Times, Fast Company, Motley Fool, and the Wall Street Journal, among others. His curiosity for new technology fuels his ongoing pursuit of pushing the industry forward.
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