During the 2017 holiday shopping season, retailers saw a 5.5 percent increase in sales from the previous year. Now that the holiday crush has come and gone, most executives are busy celebrating a huge jump over the prior year, and consumers are still dizzy from another whirlwind shopping season with delayed shipments and missing packages.
The battle for the relevance and convenience that keeps customers coming through the physical or proverbial door didn't pause for Christmas dinner. In an even less certain 2018, retailers must reflect and recalibrate quickly to succeed.
The Logistics and Shipping Headache Will Only Get Worse in 2018
This past holiday season, a majority of consumers spent up to 15 hours shopping for gifts. And despite the fact that they’ve spent tons of time with their favorite retailers instead of their favorite family members, there are still major mishaps that retailers have been unable to fix.
While online and mobile shopping boast to be the solution to avoiding overcrowded stores, a third of shoppers still reported paying extra for shipping and ultimately not receiving their gifts on time. This year, many retailers tried to solve this issue by setting shipping deadlines earlier, but with delays from the likes of UPS as early as Black Friday, even bumping up deadlines wasn’t enough to guarantee delivery by the holiday. Thirty-five percent of shoppers reported placing their orders by the deadline, yet they still didn't receive their gift in time, which seems pretty unbelievable when we’ve figured out tech solutions for everything from personal shoppers and chatbots to checkout kiosks.
Knowing that these logistical nightmares are enough to send their best and most loyal customers away, retailers need to examine how to better meet consumer expectations. With 41 percent of shoppers asking for immediate in-store pick up, retailers should consider an implementation strategy for early 2018, especially given it provides a true solution to shipping woes. While some larger retailers are buying this expertise, given the continued logistical issues from the major couriers, smaller players should look to more experimental solutions with specialized startups. Putting this into effect early this year will allow retailers to adjust and perfect their offering so that come Black Friday, consumers will have the pleasure of a seamless mobile to in-store experience.
It’s Not Just About November and December – Loyalty Leads to Year-Round Success
Consumer research shows that nearly a third of shoppers are getting their holiday gifting done as early as October to avoid the holiday crush, and 12 percent are waiting until after the holiday season is over. Most retailers are focusing all efforts on getting in front of consumers from Black Friday to Christmas Eve, but they're missing a bulk of customers and sales dollars by doing so. By taking learnings from the 2017 holiday season and implementing a more customer-centric approach for 2018, retailers may be able to relieve the pressure that so often comes with meeting end-of-year/holiday sales targets.
Despite the natural burst that the holiday crush brings to the retail cycle, it’s not the holiday that creates a lasting, loyal relationship between the customer and retailer. Long-term customer relationships aren’t built on punch cards, they're built on understanding and meeting the customer’s needs. This includes increasing investment in customer relationship management (CRM) systems for retailers large and small. At any size, retailers need to have a firm grasp on who their customer is and how they're interacting with the brand year-round – e.g., which channels are preferred and which triggers are actually working. Another priority in 2018 should be understanding that the increasing use of artificial intelligence (AI) will play a major role in sifting through data and creating strategic suggestions on customer retention. AI is not a fad; it' absolutely the key for retail’s future. It’s crucial for retailers to have intelligent systems analyzing and taking action on the rich data they've been collecting over the last couple of years.
Using Mobile to Make the Biggest Impact
This year, for the very first time, mobile surpassed desktops for holiday shopping, marking it as the clear preference as the online tool to support shopping. What has pushed mobile forward in the eyes of consumers is its flexibility to support the shopping experience in-store, at home or wherever is most convenient for the customer to make purchases. While many consumers are certainly looking to the convenience of online, 28 percent of shoppers still report going to stores first. Retailers have the opportunity to use mobile as an in-store assist, giving consumers the option of not only making their purchases via mobile, but also improving, surprising and delighting consumers when they do choose to visit brick-and-mortar stores. Retailers need to use the first half of 2018 to test their mobile to in-store strategies and collect feedback from their customers on what's most valuable to their shopping experiences. This will help ultimately build an effective strategy for the holidays later this year.
So, retailers, yes, raise your glasses to a successful 2017 holiday shopping season, but then start putting your best minds to work on how strategies can be put in place now to be even more impactful for 2018.
Maya Mikhailov is the chief marketing officer and co-founder of GPShopper, an integrated mobile commerce platform.