Tis the season to be shopping. The day that once marked the start of holiday gift shopping season is starting to become a culture — shaped by consumer expectations and technology — built around how we want to shop and gift. It’s making this time of year a little more magical for shoppers and their retailers.
Customer Experience is a Profitable Business
More retailers gradually ease into Black Friday with some starting holiday specials as early as the first week of November because they know it is no longer just about offering the best deals; it’s much more than that. Now, it’s all about creating meaningful customer experiences that build loyalty in an intensely competitive marketplace.
And there are about 60 billion reasons to get into the business of customer experience, according to Customer Growth Partners who reported the dollar amount in sales for this year’s four-day holiday weekend alone, a 5.1 percent boost from last year.
Walmart rewarded Black Friday shoppers who waited in the cold to shop in-store with hot cocoa, coffee and cookies to keep their hands warm and spirits high.
Black Friday Doesn’t Come Without Its Risks
One thing hasn’t changed, retailers are still using the loss leader approach to bring store and site traffic over the Black Friday season that now extends into December, well beyond Cyber Monday with Green Monday on December 10th this year. Selling select products at a loss brings more money to your store or website for other accompanying purchases.
Retailers are focused more than ever on pushing promotions and these loss leaders throughout November and December — spreading out the demand and enabling fulfillment. All the while, the marketplace is in a transformation to online and omnichannel.
More brands are finding powerful ways to seamlessly integrate the online and offline customer experience. Walmart’s mobile app became an interactive guide — empowering customers to chart the fastest course to their deals of choice.
Target’s Cartwheel app, known for putting a “whole new spin on coupons,” was at the center of its online and in-store buyer’s journey. The retailer also implemented mobile checkout, a feature used by Kmart in the early 2000’s, increasing customer satisfaction with shorter wait times.
While online sales jumped significantly, retailers saw a reassuring show of in-store traffic, something to be thankful for while their most pivotal season of the year is still underway.
There Are More Retail Opportunities Than Ever Before
This year Thanksgiving is bookended by four uninterrupted weekends of shopping leading up to the holiday — powering more last-minute purchases with higher weekend volumes — not to mention the post-turkey sales and an extra day of shopping this year before Christmas.
Omnichannel customers spend more, and the numbers this season are falling right in line with that statistic. The lines between channels are blurring and shifting with customer engagement — moving ever closer to convenience.
Shoppers spent $2.4 billion online on Wednesday, Nov. 21, according to Adobe Analytics data, and another $406 million online by 10 a.m. Thanksgiving morning. By the time the turkey was carved and on the table at 5 p.m., consumers had spent another $1.75 billion.
Black Friday brought a changing focus on in-store versus online shopping with an overall increase of 28.6 percent in online sales over last year. The shift to online sales gives customers the convenience to make purchases over leftover turkey and pie, instead of weathering the sometimes unpredictable and chaotic in-store crowds that once made the shopping holiday more controversial.
And, No Surprise Here, Pricing is Important
Customer experience isn’t the only factor pushing businesses to offer holiday savings sooner. Pricing transparency across competitors is also motivating retailers to launch promotions earlier to capitalize on market share and capture demand. A new best practice is emerging with more retailers launching Black Friday the week prior and pulling promotions through Cyber Monday to extend demand over the weekend.
Amazon started Black Friday deals early on November 16t this year.
The right pricing is always critical to bringing consumers in online and in-store. With more price transparency than ever before, customers have access to more options with every passing year. That means retailers need to be laser-focused on offering the right prices and stocking the right inventory.
More retailers are looking to artificial intelligence (AI) and automation to measure demand in real-time and build their seasonal strategies accordingly. Relying on guesswork in today’s retail climate — whatever the time of year — isn’t just less than ideal, it’s dangerous for retailers who have never had more competition.
As we move into 2019 and approach a new decade, it is imperative for retailers to own their pricing strategy all year long. That means understanding how climate change and major weather events impact demand. What impact do holidays or even your local Taylor Swift concert have on demand in stores and online that day?
Having the right technology in place keeps you up to speed with the marketplace and your consumers. And the only constant is change – this new retail culture will push shopper expectations and profits higher every year. Are you ready?
JoAnn Martin is vice president of retail industry strategy at JDA Software.