Before we can say 2020 is a “wrap,” there’s still shopping to be done.
The challenge? For many, the impending holiday season feels a bit like the rest of year: rife with uncertainty, ongoing changes and unfamiliar situations. Retailers and consumers alike are facing things they could never have previously imagined.
Retail industry analysis shows that out-of-stocks are a likely issue, posing a challenge for both consumers and retailers. So, too, is consumer concern about choosing the wrong gift; if it has to be returned to a store, it might place the recipient at COVID risk. And what it will mean to be in-store at all, rather than shopping online? Long queues with limits on the number of occupants? Stressed-out shoppers policing others about wearing/not wearing masks? Employees stretched to the limit meeting customer expectations while also balancing ongoing sanitization and other tasks? A recent Deloitte study revealed that 51 percent of respondents were anxious about shopping this holiday season. Adding to the anxiety: It also showed that two in five shoppers expected to spend less year over year, due to concerns about the economy; one in three are in a worse financial position this year.
That won’t likely buoy the hopes of shop owners. It doesn’t take much retail industry analysis to know that retailers have had a painful 2020. We saw companies like Neiman Marcus, J.Crew, Pier 1 and GNC file for bankruptcy. Overall, clothing and clothing accessory stores saw more than a 75 percent drop in monthly sales from April to May; electronics and appliances dropped more than 43 percent, and furniture almost 49 percent. Even as number have begun to rebound, retail industry trends show that shoppers’ habits have changed, including increasing the desire to shop local if not online.
(Whew. Pass the eggnog, please.)
Certainly, the season offers both challenges and opportunities to the retail industry. Let’s take a moment, then, to explore critical success factors for retail over the coming weeks. Consider it a little gift, just for you.
Creating holiday “magic”
It wasn’t that long ago that a magical shopping experience meant it was high-touch and immersive. For 2020, however, retail industry trends show that the most magical experience may be the seamless and efficient one. To that end, some retailers are incorporating pre-visit virtual sessions to browse items in advance and reduce time in stores. Others are stepping up curbside pickup and BOPIS (buy online pickup in store) and opening popup locations to ease store traffic.
But efforts are still underway to deliver iconic experiences, just in fresh ways. Consider Macy’s, for example, turning its Santaland experience into an interactive, virtual event this year. At Bass Pro Shops, Santa is present, but behind a clear shield. Brookfield Property Partners will place Santa in a “snow globe.” Unibail-Rodamco-Westfield has planned virtual scavenger hunts at Westfield malls. Here, critical success factors for retail include helping kids enjoy Santa, the socially distanced way.
Having what shoppers want, when they want it
For many, the pandemic has shifted priorities—and, therefore, shopping lists. There’s increasing desire to spend on home furnishings and decor, helping things feel festive. In addition, fewer large family gatherings are expected, as well as fewer white-elephant, Secret Santa and/or colleague small gift swaps, with some people still working from home. Experiential gifts, such as tickets to events, also are challenging, with so many cancelations, delays and shifts to virtual happenings instead. Planning the right assortment, then, might be akin to having planned for the rest of the unpredictable year. No surprise that retail industry analysis reveals gift cards are expected!
Then there’s the issue of value. Industry blog Retail Minded noted that retailers will have to work harder than ever to earn shoppers’ disposable income. “The pandemic has created a paradigm shift in how people spend their money…. Retailers will have to showcase value beyond cutting prices and prove to consumers that their purchase is well worth the investment.” In addition, some will be browsing and/or purchasing online before visiting the store to streamline efforts and perhaps reduce impromptu purchases.
As much as ever, retailers must run a tight, efficient ship, and must have transparency into stock and availability.
Again, out of stocks are a very real probability, in keeping with supply chain challenges and uncertainty seen throughout the year. A recent Oracle survey showed that 47 percent of respondents define a bad shopping experience by out-of-stocks. Further, 63 percent would go elsewhere rather than waiting for a retailer to restock. There’s not much room for error.
Retail industry analysis also highlights the likelihood of e-commerce stockouts. Categories at Amazon most likely to be out of stock include clothing, shoes, jewelry, appliances, sports and outdoors, home and kitchen, baby products and pet supplies. Walmart has stocked up on items that have seen an increase throughout the pandemic: bikes, exercise equipment, athleisure, TVs and laptops. The company has also sought to hire an additional 20,000 workers to help meet demand in e-commerce fulfilment centers.
Getting it there on time
Retail industry trends indicate that rising carrier surcharges and delivery costs may play a significant role in the season. E-commerce has exploded overall in 2020, and UPS, USPS and FedEx have all increased fees. Retailers must balance how they handle those fees as shoppers continue to want to buy online and not be responsible for shipping costs themselves.
How that all plays out is uncertain; retail industry analysis indicates a potential “shipageddon,” with up to 7 million packages delayed every day between Thanksgiving and Christmas. Shippers have been rising to meet the increased demand for online orders all year; if retail industry trends are to be believed, the time to “shop and ship early” has already passed.
Spreading out the season
In some cases, holiday sales began before Halloween, helping retailers better manage limited inventory, product availability and other anticipated challenges. In addition, as consumers continue to shy away from large crowds, in-person Black Friday offerings have fallen by the wayside. Recent years have seen Black Friday extend into a week or more; this year, it may extend for months. Some large retailers such as Target, Best Buy and Walmart are in the Black Friday season for the long haul. Target has been dropping new deals every week throughout November. The retailer will close for Thanksgiving Day, but still offer an in-person Black Friday event.
Shoppers will increasingly spread their season from desktop to mobile, too. US consumers are expected to spend nearly 1 billion hours shopping on mobile for the holidays. In 2019, these retail industry trends were already starting to emerge. Some wondered whether the number of mobile shopping app downloads consumers made would be an indicator of Christmas season success. All told, mobile shopping is expected to reach $314 billion in 2020, up $200 billion from four years ago, and accounting for 44 percent of e-commerce sales. The time to make the most of tech is now.
Tying the bow on top
In the midst of unpredictability, capturing and quickly acting on “right now” data makes all the difference. Winning retailers like Lidl, Urban Outfitters and Wakefern use CB4 to derive actionable insights from basic POS to help them deliver shoppers the satisfying bricks-and-mortar experiences they need most this year. Learn more how by watching a short demo.