The events of 2020 will change the festive holiday season as we know it. COVID-19 has disrupted the retail sector in ways that we have never experienced. In addition to the unprecedented volatility, consumer behaviours and trends have also accelerated faster than anticipated.
We understand the last six months have been challenging, but it is important that retailers double down on planning and preparation for the 2020 holiday season. There are positive signs for a strong shopping season providing the opportunity to recoup lost revenue and more importantly to acquire new customer relationships that will set your business up for a strong start to 2021.
It is going to be impossible to accurately forecast based on previous years but as we are learning to live in the new normal there is recent data and insights combined with some retail best practice that will help retailers plan for success.
Online sales growth will be significant
2020 will deliver more than just a steady increase, the growth will be exponential and ecommerce ecosystems and infrastructure will be pushed to its limits. It is not too late to put in place the right system that will ensure you can maximise sales during this holiday period and set your business up for future growth. Choose a partner who can deliver a rapid implementation service and has expert support to ensure your staff are trained and onboarded in time.
FOMO will drive an early start to the season
Buyers have already experienced delivery delays in their online shopping over this last period. “FOMO” will drive a significant number of online shoppers to start earlier and the majority of those have indicated they will be starting in early November. Click Frenzy 2020 officially launches on the 10th November at 7pm and is shaping up to be bigger than Black Friday/Cyber Monday. The season is likely to be a sustained period of online shopping through the month of November as consumers will want to ensure their deliveries will arrive in time.
Consumers will be bargain hunting and comparison shopping
The main reason that shoppers are going to be increasing their online spend^ is to take advantage of bargains. This is over and above avoiding COVID-19 exposure from other shoppers in physical stores. In terms of the discount thresholds that you want to consider, 36% is the average discount required to trigger an immediate purchase. What’s also important to understand^, 50% of online shoppers will purchase at a 25% discount and additional discounting above 50% achieves minimal additional sales.
Black Friday could become Pack & Ship Friday
With the additional surge in e-commerce, it’s almost certain that the cut-off date to ensure product delivery by Christmas will be earlier than ever. The early start to the holiday season may offer some benefit to retailers giving them more time to convert customers earlier and process and fulfill orders to get ahead of demand. Rather than shipping online orders from a central warehouse, retailers can decentralise fulfilment and ship from a nearby store with available stock that is in the same region as the customer. With the right systems, your software finds the best outlet with available stock to fulfil the order. Offering this in combination with ‘Live Stock In Store’ and ‘Click & Collect’, you’re providing shoppers with the full range of choice and convenience to get their goods in time.
Offer an omnichannel customer experience
The reality is that we live in an omnichannel world where consumers expect to be able to bounce seamlessly between different channels and have the same experience. They want to research and find available products online (and see “live stock in store”) and be able to immediately pick up from a nearby physical store (“instant click & collect”). Your gift vouchers and special offers also need to be omnichannel for both purchase and redemption.
Customer acquisition is the real opportunity
The increased volume of online sales will enable a massive collection of data that will power new customer growth programs in the new year to drive repeat sales. While there might be less people crowded into shopping malls this year, those who are shopping instore will be there with intent to purchase. Ensure your POS system makes the capturing of customer data easy and seamless for your staff so you can build a database for ongoing personalisation, loyalty programs and marketing to drive repeat store visits and maximum lifetime value into the new year. A customer is for life, not just for Christmas.
It is not too late to get ready for the 2020 season
The unprecedented nature of this year is sure to produce a holiday season that is unlike any other. If you are looking for ideas or to learn how other retailers are preparing for this holiday season our team of retail experts are always happy to chat and share what we are seeing across the thousands of retailers that we partner with.
^Data Source: Power Retail Trajectory Report, September 2020