Mitigating an economic collapse is one of many in a long line of challenges that retailers and consumers have faced over the past couple of years. However, along with the surprise resurgence of the high-street, there are definitely ways that retailers can thrive over the holiday season, especially if they can continue to understand consumer needs and meet them all the way.
An unprecedented cost-of-living crisis presents both challenges and (believe it or not) opportunities for retailers to truly connect with consumers and to subsequently earn loyalty & trust.
In the upcoming holiday sales season, we will see which retailers have successfully put the work into understanding and engaging with their customers in the ongoing aforementioned crisis and abhorrent inflation rates.
So, what will retailers need to do over this bloated holiday season in order to consider it a success?
Get Up Close & Personal with Consumers
Essentially, retailers need to be understanding and empathetic during the economic and financial ruin that's been imposed on the UK.
If retailers actively execute customer data strategies efficiently, creating tailored, personalised services and experiences to make their customers’ lives easier will prove fruitful over the impending sales season, regardless of when customers choose to shop earlier or late into the Holidays.
Consumers plan to shop the most online during Black Friday (54.2%) & Cyber Monday (54.3%). As for shopping in physical stores, nearly half of polled consumers (45.7%) said they will search for deals across the entire holiday season, and 39.7% said they planned to shop instore on Black Friday.
Research: Retail Holiday Survey 2022, JLL
We know consumer-behaviour is influenced by, and in turn, a reflection of the state of the economy.
High and low-income shoppers face two separate economic realities; whilst low-income shoppers relent on non-obligatory spending, higher-income spenders have yet to relinquish their pandemic spending habits, so tailoring a personalised experience is crucial to helping each and every individual throughout their retail journeys.
Delivering a personalised experience towards each segment of your market can become convoluted; hence why we have seen the rise of intelligent segmentation and personalisation that's driven by AI.
Google Cloud’s Recommendations AI technology is becoming a benchmark for delivering personalised product recommendations on retail websites and mobile apps, tailored to each customer’s tastes.
With the help of evolving artificial intelligence, retailers are ensuring they deliver the right product at the right price at the right time to the right customer.
81% of U.S. shoppers say they’re more likely to buy from brands that understand them and personalise their products and services well. Three out of four people prefer to shop with brands that are able to personalise interactions and outreach to them, whilst 86% want a brand that understands their interests and preferences.
Research 2022, Google Cloud
Value will trump Customer Loyalty
As inflation rises and the economy tries to recover, consumer loyalty is shifting again — this time to experience and value.
Fuelled by the Pandemic, customer loyalty made way for convenience and safety since it near-mandatory for consumers to undergo a frictionless checkout experience – often utilising the here-to-stay retail staple that is BOPIS.
According to Salesforce, half of all shoppers will switch brands this holiday season due to product pricing. Luxury brands retailers, supermarkets and department stores are far more at risk of customers leaving their loyalty cards at the door because of unpredictable price sensitivity, where they might experience significant price increases or product shortages.
Use Physical Retail Stores to your Advantage
Brick & Mortar stores will drive growth across all channels to fuel Omnichannel retail strategies.
Beyond the pandemic, we’re seeing consumers discovering a new balance between digital and physical channels. Consumers are flocking instore for that physical social experience they’ve been missing.
They want a human experience and it's important for retailers to recognise that human interaction can still set brands apart in a bustling sales season.
However, human interaction isn't entirely confined to physical stores. In 2021, brick and mortar outlets had a significant impact on digital sales, with instore employees evolving into hybrid roles such as fulfilment experts, service agents, social influencers, and digital stylists.
Among the reasons why customers want to shop in stores for the holidays are to view products before purchasing them (54.5%), enjoy the ambiance of the store (36.9%) and avoid shipping costs and delays (32.7%).
Based on: JLL Survey, Retail Dive
There’s real opportunity for retailers that have implemented an omnichannel methodology to grow faster than digital natives and ecommerce brands. Merging retail experiences across digital and physical spaces increases the value of each channel.
Consumers have a newfound confidence and love or the high-street again it seems, in what is a seismic shift in holiday shopping behaviour: 63.2% of consumers plan to do at least some of their shopping in stores this year, a significant increase of 58% compared to 2021.
With the high-street in full swing once again, we’ll hopefully see consumers surge to physical locations in much greater numbers as they seek to round off that comprehensive omnichannel retail experience.
Holiday shoppers dream of a Green Christmas
Sustainability is becoming more and more important to consumers; driven by younger demographics (especially Gen-Z), it's estimated that 60% of consumers will actively seek out sustainable products and shipping methods in the upcoming sales season.
Businesses are now tasked with mitigating the economic and financial crisis, whilst implementing new methods of 'going green', as consumer expectations now place rising importance on trust and environmental impact.
Although this isn't a quick fix and becoming more eco-friendly can have its complications, becoming an increasingly sustainable business is almost firmly rooted in new consumer behaviours.
83% of shoppers will proactively seek out sustainable brands and products this holiday.
Research 2022, Salesforce
When it comes to environmental practices, they are the decisive factor when it comes to influencing consumer's purchasing decisions, more so than racial equality, employee wellbeing, and customer satisfaction.
Implementing sustainability initiatives and honouring green pledges are essential to unlocking the eco-friendly consumer segment, and it's definitely something that retailers should only incorporate over Christmas - prioritising sustainability should be a fundamental cog in any business.
88% percent of consumers now expect brands and retailers to clearly state their values. And shockingly, 64% will stop doing business with a company if corporate values don’t align with their own.
Research 2022, Salesforce
Despite a portion of consumers claiming that sustainable goods have been at the heart of their purchases, that didn’t always reflect in their purchasing behaviour.
However, new Salesforce research suggests that this has indeed altered, with 42% of shoppers saying they will consider paying more for sustainable shipping options or select a longer delivery window.
Honesty and total transparency is a sure fire way to attract and win the respect of eco-friendly consumers.
Be up front about your businesses' recycling policies, climate strategies, environmentally friendly technology implementation and the energy-performance of your operations - especially packaging and labelling transparency, which are the top two sustainability factors that fundamentally earn the trust of consumers with the planet at heart.