Retailers have always looked to the Christmas period for a flurry of activity, and it continues to be critical, with sales up more than 15% in December 2015 compared to the same period in the preceding year. But, writes Niklas Hedin, CEO of Centiro, the nature of the beast has definitely altered, and the days of Christmas shopping being a short sprint to the finishing line are long gone. These days the period has become longer and more like a marathon, with demand spikes coming anywhere from Thanksgiving through to Black Friday, Cyber Monday and even the January sales.
Retailers who have failed to move with the times are in a perilous position; like a marathon runner that hasn’t trained properly, they will burn out early if they’re not geared up to run the full course. Those who are unable to effectively manage their carrier networks over an extended period of time will struggle: over the peak shopping periods last year, some carriers became over-run and stopped taking new orders, which meant retailers without a network of alternative carriers were unable to deliver on promises to customers. Customers are becoming increasingly demanding, so making a mistake during this critical period could risk losing them for good. Retailers must ensure they’re geared up to give customers what they want over the whole period if they want to win the race.
Clearly retailers will need to prepare correctly if they are to succeed in this environment. Here are three points retailers will have to keep in mind when limbering up for the extended peak period at the turn of the year:
Planning ahead to ride out peaks and troughs
The days of simply ramping up activity in the weeks leading up to 25th December are long gone. To succeed over the extended Christmas shopping period, retailers must ensure they are able to match supply to demand over the peaks and troughs of the whole season. This approach must be applied across the entire year, as retailers have to prepare themselves for the many peaks and troughs that occur across the year. They need to plan months in advance to ensure activity can be scaled in line with demand. The continued growth and evolution of online retail means the landscape will be continually shifting, so the key is being flexible, developing plans for the future that fit in line with the way the environment the operate in evolves.
Online Christmas shopping is the new normal
We’ve seen much excitement about Black Friday and other sales events in the UK over the last few years, and hunger for these events is clear. It’s becoming increasingly normal to purchase at least some of your Christmas presents during an online sales event; our research with YouGov showed that in 2015, almost half of online Christmas shoppers made at least some of their purchases during an online sales event. If retailers aren’t geared up to meet the demands of omnichannel retail, they risk being over-run and letting customers down. To make a success of this new climate, retailers must be able to provide a consistent customer experience across these periods of peak activity.
Handling online orders effectively isn’t just about successful delivery but also the returns process: as people get carried away with the spirit of a big sales event, many of them will end up returning hastily-purchased items at a later date. In fact, the YouGov research revealed that eight per cent of online shoppers returned an item this Christmas, which means retailers must also be prepared to handle a higher level of returned items. While many see this as simply a cost-recovery exercise, the returns process is actually an opportunity to provide a great brand experience for customers, building their affinity with the brand. Failing during this time will risk damaging sales in the short term and customer loyalty in the long run.
Customers need increased options to match increased demands
Customer expectations appear to be inflating by the day, which means retailers must take action to ensure they are able to keep up. As well as effectively managing carriers to ensure they are able to provide enough options, retailers also need to be flexible to meet the needs of the customer.
Consumer behaviour has changed for good and consumers no longer just make a last-minute run to the shops in the weeks leading up to Christmas. In coming years, customers will increasingly expect to receive and return items in a way that suits them, and a retailer being busy will be no excuse to a shopper that will just take their business elsewhere. Convenience will become even more key for Christmas shoppers in future and retailers will need to ensure that everything from instore, click-and-collect and online operates seamlessly to deliver a full circle brand experience that will make them come back for more.
By addressing these three points, retailers can ensure they are preparing for the marathon ahead in the right way. Retailers must adjust their approach to ensure they can meet the demands of the modern consumer, delivering on the customer promise across a longer period of time and providing a hassle-free, easy full-brand experience for customers who want to return or exchange products. You wouldn’t get a sprinter like Usain Bolt attempting to run the London Marathon without changing his tactics and preparation for the race, and it is no different for retailers here: success depends on enduring the extended race ahead.