Take a deep breath. Black Friday is a mere 2 days away. For the next 8 weeks, retail and e-commerce businesses will make or break their year, win and lose customers, and determine the health and success of their business. 8 weeks of grind, no days off, long hours, over and again until it’s over. Retailers who prepared and who are up to the task will succeed at the expense of their peers.
This sales period is a massive opportunity for retailers. 2017 saw 32% growth in revenue vs. the previous year - a trend that is not slowing - while many retailers receive up to 40% of their annual revenue during this period. We’ll examine 5 ways some retailers will capitalize on this growth, beat the competition and win this peak season.
1. Mobile-First Strategy
It’s no secret that we’re all addicted to our mobile devices. We can do everything on them from fitness classes to audiobooks to booking restaurants. Shoppers expect the same simple and intuitive mobile experience for browsing, shopping and customer service.
Growth in mobile is also driven by the growing adoption of mobile wallets, which were a part of 40% of total mobile orders last retail season. This is a number that will doubtlessly grow, reducing friction by making your purchases one-click.
The overall growth of mobile as a purchase channel cannot be understated. Last year saw an increase of 46% in orders placed on mobile. Of the 60% of shoppers who visited a site on a mobile device, 17% created a cart - which was a 12% increase over the previous year.
Customers are flocking to mobile as their number one channel. Retailers who have locked down their mobile experience, and can facilitate a simple purchase (likely with mobile wallet options) and service experience will make good on customer preferences, and do very, very well this season.
2. The Need for Speed
Instant gratification is at the heart of many purchases, while the temptation of discounts slakes our hunger for a good deal. Therefore, the order fulfillment and shipment process must be rapid. Today it is Amazon Prime that sets this benchmark.
Amazon also sets the pace for service. Customers expect immediacy and clarity in service interactions - 42% of customers expect a response within one hour over channels like email or a webform, while even a 1 minute wait time over conversational channels like chat or Facebook Messenger is considered an eternity.
84% of customers say that speed of resolution is either very important or critical to their brand experience, which has important implications for loyalty, promotion and purchasing propensity - in fact, 75% of customers say they spend more due to positive service interactions, a fact inherently rooted in speed.
The retailers who have set up their customer service organizations to respond to queries rapidly, through one or a combination of process improvements, staff flexing or technology will quite simply enjoy better results than their peers.
3. Data-Driven Everything
Data. It’s everywhere. If you’re a retailer data can be overwhelming; collected from website visits to conversion rates to purchase history. The challenge for many retailers is that functions are not aligned, information systems and data can be siloed and scattered, and it all conspires to often make data too difficult extract and use.
This problem comes at an unfortunate time, as customers expect personalization and customized journeys. 63% of shoppers say they feel retailers don’t know who they are, in spite of all the data shoppers freely provide. Yet 67% of millennials are willing to share data about their preferences to get faster and more convenient service. That’s an astounding mismatch in expectations.
Elite performers - businesses who have posted at least 10% revenue growth in the last 12 months - focus on data at nearly 2x higher rates than under-performers. If data is unlocked, it can be harnessed for tailored pricing, search results, channel content and so on. Retailers who effectively utilize data to power marketing, commerce and service will tighten their customer relationships, and as a result, perform better this season.
4. You Can Take Personalization to the Bank
Personalization isn’t a nice to have. Customers have proven that they both crave it and will pay for it. Last peak season AI-powered shopping personalization accounted for 28% of total revenue, recommending products based on a customer’s historical order patterns or overall purchase patterns.
As a specific example, during Cyber Week last year, while only 5% of shoppers clicked on a given personalized product recommendation, those who did accounted for 30% of the product’s revenue. There is an outsized impact on the purchase propensity of customers who receive a personalized recommendation.
The winners this year will have already put systems in place to leverage data for personalization efforts - boosting conversion, basket sizes and sales.
5. Many Channels, One Experience
Most retailers are under tremendous pressure: competitors (old and new), technology and changing economic forces are eliminating price and product as differentiators. Retailers today differentiate via a holistic consumer experience.
Preferred channel availability is a big part of experience, yet new channels put retailers on the hook for delivering a consistent experience across all touch points. As noted above, customers will not wait long for service replies, and at the same time expect to be known just the same, whether they connect over Instagram or email.
Service plays a big role in channel viability; service teams must be consistent in communication, provide fast support and quickly resolve problems, all while managing the inevitable volume spikes that comes hand-in-hand with the peak season.
This year’s winners will have invested in channel optimization, using technologies like AI and automation to provide a buffer for service, rather than hire a flex team. This allows the business to save costs and maximize revenue, keeping customers happy in the process.
Once the results are in, revenue from this peak season will indicate the obvious leaders in this space. Yet the real winners will be those retailers who continue to deliver a premium customer experience through to the end of January, and retain customer loyalty into 2019 and beyond.
It might be too late to change anything in the next two days, but the opportunity to improve using lessons learned in 2018 will present itself before we know it, with preparations for 2019 starting as soon as this season closes.
- Consumer Experience in the Retail Renaissance, Deloitte Digital
- The Best of Both Worlds: Why Omni-Channel Retailers are Winning, Salesforce
- Connected Shoppers Report 2017, Salesforce Research
- All Wrapped Up - 2017 Holiday Shopping Analysis, Salesforce
- McKinsey Global Institute