This is the first of a two-part series sharing the perspective of Salesforce Consulting Partners on everything retailers need to do for a successful 2019 holiday season.
Labor Day has come and gone, Halloween is on the horizon, and before we know it, the holidays will be here. Black Friday will capture $40B in digital sales this year, making it the top digital shopping day of the year. And, it sets the stage for the holidays — the most wonderful time of the (retailer’s) year.
We surveyed some of our 5,000+ Salesforce Consulting Partners to better understand top customer pain points they consistently see during the holiday season and how you can solve them.
Pain point #1: Inventory planning
This season, shoppers and retailers will lose six days between Thanksgiving and Christmas Day. With the shipping window closing quickly on shoppers, retailers have a huge opportunity (and potentially a huge loss).
“The holiday period equates to much more traffic and much more demand for a speedy turnaround on delivery. In turn, it puts retailers under pressure to provide these services in the fastest time possible. Indeed, Amazon Prime has set the standard for quick delivery, so for its competitors it will be a massive challenge to keep up the pace. And, this can cause problems, as the chances of a mistake increases, and the higher workload means that seasonal workers must be hired.” —James Webster, Wunderman Thompson Commerce
By December 15 of last year, 80% of shopping was complete, just in time for the USPS Christmas shipping deadline on December 14. But, there’s still that 20%. Unless shoppers are willing to pay for rush shipping, the deadline has passed for most online orders in time for Christmas delivery.
“The one-day promise of retailers will be difficult to be met, particularly for non-Amazon retailers who haven’t planned and tested their deliveries for the full year.” —Hilding Anderson, Publicis Sapient
Retailers can combat this by offering “click and collect” — otherwise known as “buy online, pick-up in-store” (or BOPIS). This gives shoppers more control of their experiences, saves on last-mile delivery costs, and offers peace of mind against porch thieves.
“Offering services such as click and collect, expedited delivery, and same-day delivery for local purchasers could be a differentiator to customers who are on the go. Be clear on shipping deadlines and offer free shipping earlier in the season to encourage early purchases.” —Jennifer Horner, DEG, Linked by Isobar
However, it’s not enough to just offer “click and collect” — retailers must ensure the pick-up process is seamless. Otherwise, it could be detrimental.
“Most stores are not set up for a significant volume of BOPIS. As a result, store, inventory, and returns will all impact customer experience and retailers’ profitability this year.” —Hilding Anderson, Publicis Sapient
According to the 2019 Holiday Readiness Guide, retailers can prepare your store for order pick-ups by training staff on the process for online orders and setting up a dedicated area for online pick-ups with clear signage near the store entrance. If it’s an option for your store, consider curbside pick-up or dedicated parking for online shoppers to make the experience even more seamless. Some Partners feel it’s critical to focus on shipping dates.
“Offering services such as click and collect, expedited delivery, and same-day delivery for local purchasers could be a differentiator to customers who are on the go.”
"As the competition increases during the holidays, we work closely with clients to create shipping strategies to be more competitive during prime days. This includes offering free shipping, BOPIS or same-day delivery, but doing so with a well-planned inventory strategy to avoid out of stock issues for core products.“ —Todd Bowman, Merkle Inc.
“There is a significantly small window of opportunity to capture holiday sales between Black Friday and the holidays. Oftentimes, companies try to get ahead of any problems with fulfillment and shipping cutoff time. We suggest that companies take advantage of their retail locations and office spaces for fulfillment. Companies must understand their localized landscapes and leverage them to optimize supply chains for holiday delivery.” —Mallory Rosen, Optaros by MRM//McCann
A retailer’s inventory planning team should also ensure marketed products have the right levels of inventory support throughout the season. If sales don’t track according to plan, there should be a contingency in place.
Pain point #2: Site speed
Even the most well-known retailers suffer storefront outages and receive complaints about site speed during the holidays. This is more evident during peak shopping days like Black Friday. Every moment your site is down can cost thousands of dollars in lost revenue. In fact, 40% of shoppers will abandon a site if it takes more than three seconds to load.
“Black Friday and other peak retail days will offer different challenges for retailers. Black Friday continues to be a successful event for brands, particularly online retailers, but that comes with its own challenges. The increase in website traffic means that they need to be prepared for an increasing number of clicks and payments within a smaller space of time.” —James Webster, Head of Managed Services and Peak Trading Expert at Wunderman Thompson Commerce
Preparation for peak holiday is key and can come in many forms.
“To prepare for potential site speed issues, we conduct load testing prior to the holiday. We ensure that websites are equipped to handle a massive influx of traffic. We ensure that teams and plans are in place for 24x7 support and issue escalation if should problems arise.” —Mallory Rosen, Optaros by MRM//McCann
“To help retailers, we put together a Black Friday Playbook, which offers a planning guide to help prepare for the busiest periods, from Black Friday all the way up to Christmas. Christmas sales have always been a long-running period for retailers, as people begin planning for the festive period a month in advance, and sales continue over the New Year period. We have found that this amounts to an increase in retail spend on different devices such as mobile phones and tablets. So for retailers, it’s all about having the infrastructure in place to sustain their platforms during this busy period.” —James Webster, Head of Managed Services and Peak Trading Expert at Wunderman Thompson Commerce
We agree. Other ways to prepare include establishing a sound sales and traffic forecast, regularly performing load testing, implementing monitoring and troubleshooting tools, creating and aligning to a risk mitigation plan, and preparing your team to be on alert.
Pain point #3: Promotional strategy
Every successful holiday season comes with lots of planning. Promotional planning, to be exact. And this starts months in advance. However, things don’t always go as expected. One consistent trend in the retail industry is the idea of “discount chicken,” where retailers create a robust promotional calendar only to rip it up after the first week when sales don’t meet expectations. According to a global survey of over 10,000 shoppers, the #1 influence on shopper's holiday spending this year will be sales and promo codes. In fact, 47% of shoppers will only buy on-sale items for this holiday season.
“Retailers don’t have a backup promotional plan if they don’t hit target numbers in November.” —Danielle Savin, Capgemini
Other reasons for poor promotional strategies range from limited budgets to limited planning time.
“Managing budgets at the end of the year is always difficult. Brands can solve for this by being smart about their promotional offers.” —Jennifer Horner, DEG, Linked by Isobar
Starting early is key.
“What we see is that most marketers are busy and don’t get to holiday planning until late in the game — we begin planning for the holidays in July and put together a deck to share around [the end of summer].” —Craig Robinson, Merkle
Retailers should create an integrated promotional calendar, combining what worked last year, such as the emails that drove the most site visits or the product bundles that led to high conversion, with what’s new this year. This can be the basis for everything from special gift promotions to must-have stocking stuffers.
“Retailers need to be more proactive with Plan B if they see soft trends in November.”
And if sales don’t meet expectations, retailers must be proactive, agile, and personalized — and use data to support decisions. This can come in many forms.
“Retailers need to have reevaluated their open-to-buy strategy in the spring. Marketing and promotional calendars should be shared by channels so there are less silos. Retailers need to be more proactive with Plan B if they see soft trends in November. Marketing teams should be meeting weekly with operation departments to address demand forecasts.” —Danielle Savin, Capgemini
“Customers are typically very reliant on their holiday sales and don't always have backup plans. Holidays can make or break a retailer, but we work to ensure that their program is generating incremental revenue throughout the entire year.” —Craig Robinson, Merkle
“Customers are not always adaptable. We have "rush" templates set up to be able to deploy quickly in case metrics are not hit and there is a need to deploy something fast." —Craig Robinson, Merkle
Another key solution is being smart about your promotional strategy. One way to start is by building better data profiles. Find the overlaps in consumer touchpoints to uncover things like where shoppers click and the time of day they open email. These trends will inform how you approach dynamically serving up future personalized content and offers. Our Partners agree:
“Better integrate marketing, commerce, and service into single customer journeys — enabling the flow of data across these functions and technologies will help retailers provide the VIP experience consumers want as well as lower friction across the various touchpoints.” —Kevin Hogan, Deloitte
“A lot of brands will be incredibly promotion-focused. Rather than just promoting up to 60% off to try to keep up with competitors, brands can be more targeted with their offers and use data to determine the best offer for a person. If they've purchased in the past, they may not need as much of a promotion. If they've already purchased during the season, they may not be planning to purchase again, so a higher offer may help push them to make a purchase again. Using data to inform promotional offers and thresholds will allow brands to differentiate themselves by protecting margins more.” —Jennifer Horner, DEG, Linked by Isobar
Are you ready to have the best holiday season ever? For more tips and best practices, check out our Connected Shoppers Report, Holiday Shopping Insights and Predictions, and stay tuned for part two of this series.