In a normal year, retailers would be deep in Black Friday, Christmas and the January strategy execution. This year, however, is anything but normal, making it nigh-on impossible to plan so far ahead of time – even in China, where the economy has been unlocked for some time now, retailers find themselves in an unnerving position ahead of Singles’ Day.
In the UK, consumer spending habits are far from clear. While retail figures have started to rebalance, clothing and footwear sales have continued to suffer, with household names like Marks & Spencer, Boots and John Lewis all announcing thousands of job cuts.
Our research revealed that almost half of UK businesses had to furlough staff to stay afloat, meaning it is likely spending will be less for many, particularly as the scheme comes to an end in October.
On the other hand, those fortunate enough to have retained financial stability have been unable to spend on big-ticket items like holidays, Black Friday and Christmas to release some of that pent-up capital.
Retailers must decide whether to offer big discounts to shift locked-up stock, stay put and attempt to cash in, or take this time to completely rethink their business model. The only certainty is uncertainty – what we’ll want to buy, whether we’ll be able to visit stores or if we’ll be celebrating under another lockdown is all very much up in the air.
So how can brands ensure they’re prepared to maximise growth this holiday period?
The digital drive
The pandemic ushered in irreversible changes to the way we shop. When it comes to eCommerce spending, what’s past is prologue has been the rule to follow – that said, Covid-19 has tipped the balance and now all bets are off. Consumers are buying online at a blistering rate, with some now shopping exclusively online despite the reopening of the high street.
Before the pandemic, a traditional shop was made up of four key components: browse, touch, try and queue – none now seem appropriate, with consumers instead opting for a more functional approach.
Research suggests the pandemic accelerated digital adoption by five years in a matter of just eight weeks, and online spending will likely skyrocket this holiday season compared to previous years – retailers must therefore ensure they can cash in on the drive to digital.
This means integrating agility across every process is now a must. Rather than focussing on what’s worked well in the past, brands would do well to focus on recent trends – align products and promotions around observations noted during the pandemic. What’s more, product lines must be ready to switch if necessary – here, having ABC campaigns with alternative digital marketing, social and merchandising options ready to roll-out will be mission critical.
Insight-based Marketing
The golden quarter is the epicentre of eCommerce digital marketing activity, from email and social campaigns to performance marketing and SEO competition. Some businesses reacted to the pandemic pragmatically by pulling back digital marketing spends with the idea of saving for a big push during peak periods. While this was understandable, leaving all revenue hopes and business goals until the end of the year adds further risk to an already turbulent 2020 – now is the time to cash in at a lower cost-per-click and bring digital advertising spend forward sooner rather than later.
In addition, the pandemic’s forced pivot to digital has seen new demographics who were previously considered less tech-savvy take to the web. This is a whole new audience for many brands, and understanding their spending habits and preferences will help them segment, target and maximise marketing and merchandising efforts.
A lack of understanding about new customers and so much uncertainty around existing customers’ shopping behaviour means relying on historic data is a big risk to take. Instead, digital teams should spend time analysing search reports and other web analytics to inform merchandising and marketing decisions – by doing so, they will gain the necessary insights to understand what users are really looking for and how they’ll likely behave.
Back-end investment
Finally, with increased eCommerce demand comes increased requests for scan and go, ship from store and click and collect services. Not only this, but returns in the weeks following peak can put a huge burden on logistics. Brands should ensure their warehousing and in-store logistics capabilities are up to scratch, along with the systems behind these operations. If a store doesn’t have stock, being able to ship from an alternative store, or facilitating same-day click-and-collect services will help retain a customer’s purchase.
Equally, checking stock online, going through the hassle of masking up and coming into the store – which is less of a convenient and pleasant experience than it ever has been – only to be let down by no stock, is the worst possible outcome. Providing the frictionless journey customers desire requires a combination of multiple fulfilment options and transparent, real-time information regarding inventory levels and delivery.
A seamless golden quarter
Exactly how this year’s peak period will pan out is anybody’s guess. Employing the usual strategy of what’s worked well in the past seems counterproductive. While we can expect the drive online to be a key component of the post-pandemic shopping holidays, exactly what consumers will be buying is currently up in the air.
To prepare, brands should have multiple campaigns ready to roll-out in advance, along with the processes in place to capitalise on the digital migration. While it may be too late to implement large-scale changes to the technology stack or warehousing options, there is still time to ensure the processes, training, automation and communications are in place to ensure peak operations run smoothly.