The holiday shopping season is sink-or-swim time for retailers – it presents the opportunity to exponentially increase revenue, attract new customers, increase brand loyalty, and deplete their inventory before the year ends.
With economic pressure escalating, retailers need to consider the consumer behavior they can anticipate during the 2023 holiday shopping season and how they can optimize their operations now to maximize success.
4 Ways Retailers Can Prepare for 2023’s Holiday Shopping Season:
- Optimize Your Supply Chain
- Focus On and Optimize Your Omnichannel Experience
- Recognize the Impact of the Recession
- Understand Your Customer Base
Optimize Your Supply Chain
If there is one thing that will make even your most fiercely loyal customer turn to a competitor, it’s out-of-stocks. A study found that if a preferred brand’s product isn’t available, nearly every shopper (98%) would buy from a different brand or search other stores.
To prevent this scenario and ensure they can provide their customers with the products that they want when they want them, retailers need an optimized, efficient supply chain with full visibility and reliable data accuracy.
This is especially vital during the holiday season when retailers get hammered with more customer traffic and purchases than at any other time of year. If organizations aren’t prepared and don’t have the desired product available, they risk losing significant revenue by driving customers to shop with competitors instead.
Optimizing your supply chain is far from an easy task, however – global supply chains have become increasingly intricate, and organizations today face challenges that come with navigating complex networks of suppliers, distributors, and logistics partners across different countries. The pandemic also dramatically impacted the supply chain, and retailers are still adjusting today.
Businesses can improve their demand forecasting and supply chain visibility by harnessing the power of AI.
AI-powered technologies like machine learning algorithms and predictive analytics empower organizations to:
- Gain real-time insights into their supply chain to understand exactly where their products are sitting
- Identify inefficiencies and opportunities to save costs when getting their products to stores and distribution centers
- Align their supply chain with projected patterns, trends, and customer needs, reducing the risk of excess inventory or stockouts
- Easily identify bottlenecks and disruptions and swiftly address these issues
- Analyze massive volumes of data across multiple platforms, including social media, customer feedback forums, and email inboxes, to identify patterns that impact demand and adjust demand forecasts accordingly
By achieving this level of transparency and gaining valuable insights from their data, your retail organization can optimize inventory levels, drive cost savings, and maximize efficiency, which are all essential during the high-traffic holiday shopping season.
You can also enhance customer satisfaction this holiday season by ensuring they have the right product on hand or ready to ship when and where your customers want it.
Focus On and Optimize Your Omnichannel Experience
Consumers today are leveraging e-commerce and shopping on their mobile devices more than ever. During the holiday shopping “peak” – the weekend of Black Friday to Cyber Monday – mobile and online shopping peak, too:
- Two-thirds of holiday shoppers preferred to get their deals online in 2022
- In 2022, mobile accounted for 77% of all e-commerce traffic during peak
- Mobile also accounted for 65% of all buying sessions during peak
- Black Friday 2022 saw a 35% increase in mobile traffic and 27% increase in conversions compared to normal, day-to-day mobile shopping
Clearly, customers aren’t just interacting with your brand’s online and mobile presence to browse products – they’re using their mobile devices to finish the buyer journey and complete purchases, especially when holiday shopping.
Despite strong evidence that customers value an omnichannel experience, brands continue to miss the mark, creating friction and impeding customer experiences during the holiday shopping season.
Errors with your e-commerce site lead to higher bounce rates. This, in turn, increases abandonment and reduces the likelihood of your visitors completing a transaction and becoming loyal, repeat customers. During peak holiday shopping last year, a jarring 16% of all online shopping sessions resulted in site errors.
Your brand needs to be ready for the surge of traffic and conversions that occur during the holiday shopping season. Retailers should prepare now by optimizing and expanding the opportunities their customers have to engage with their brand.
A true omnichannel experience means meeting your customers where they’re at with touchpoints across multiple platforms, such as:
- Using mobile apps to research products
- Buying products online and picking them up in-store
- Completing an online order in-store to ship a product that is out of stock at that location
- Receiving personalized promotional emails
- Engaging with your brand’s accounts on social media
It is not enough to have a mobile-optimized site or BOPIS options, however. You need to be sure your brand’s e-commerce site, mobile app, and any other touchpoints are optimized and well-equipped to handle the massive volumes of holiday shopping traffic.
Otherwise, you risk customers abandoning their carts and shopping with competitors.
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Recognize the Impact of the Recession
Customers still plan to buy gifts during the 2023 holiday season; however, the current economic uncertainty is expected to impact their buying habits. Notably, 85% of consumers expect inflation or a potential economic slowdown to impact their holiday celebrations and shopping this year.
In order to accommodate the pressures of the inflationary environment and their reduced spending powers, consumers say they will save money by:
- Buying items on sale (67%)
- Buying fewer items overall (48%)
- Using more coupons (47%)
In 2022, the majority of customers said they planned their shopping strategy ahead of time, before the holiday sales actually took place. This statistic, coupled with the inflationary pressures and reduced consumer spending power in 2023, indicates that retailers that get their deals in front of customers early are more likely to get a spot on their holiday shopping list.
Retailers would be wise to offer appealing promotions and communicate those deals with their customers effectively and proactively to maximize holiday shopping traffic and sales.
Understand Your Customer Base
As we mentioned above, most Black Friday shoppers prefer to get their deals and buy their gifts online. This gives many retailers permission to stay closed on Thanksgiving Day: nearly 60% of consumers said they support the stores they usually shop at closing for the November holiday.
Some brands have taken it a step further by closing on Black Friday – a move that seems incredibly risky on the biggest shopping day of the year but can actually pay off if you truly know your customer base.
For instance, in 2015, REI made the decision to close its brick-and-mortar stores on Black Friday and instead encouraged its customers to #OptOutside rather than come into stores to holiday shop.
As a PNW-based retail and outdoor recreation services corporation, REI embodied its brand values (that resonate with its customers) with this #OptOutside campaign and business decision. They recognized that their customers, like their employees, would likely prefer to spend time outdoors than in a throng of holiday shoppers at a brick-and-mortar location.
This decision paid off in dividends. In its first year of #OptOutside, REI saw a 10% bump in online traffic on Thanksgiving and a 26% increase on Black Friday. REI has experienced similar increases in e-commerce traffic on Thanksgiving, Black Friday, and Cyber Monday every year since introducing its #OptOutside campaign and driving customers to its website rather than its brick-and-mortar stores.
At the end of the day, the retailers that perform the best during the holiday shopping season are the ones that truly understand who their customer base is and what they’re looking for – whether it’s significant discounts or the encouragement to enjoy the great outdoors.
Bolster Engagement, Satisfaction, and Sales This Holiday Season
Due to inflation and reduced spending power, the retail market is a more competitive space than ever before. Brands need to go above and beyond to attract, retain, and build relationships with customers.
Our experts at AIM Consulting are deeply familiar with the retail and e-commerce space and have helped clients deliver exceptional products and experiences that delight consumers. We also provide custom-fit AI solutions that help retailers increase operational efficiency and optimize their supply chain.
Whether you need help developing an engaging loyalty program or mobile app, optimizing your omnichannel experience, or using predictive analytics to identify trends and patterns to prepare for this holiday season, we have the strategy, industry knowledge, and technical skills to achieve your goals.
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