COVID was the Grinch that stole much of the holiday shopping experience last year. Will he return in 2021? Not likely. However, he has made his mark on how we will experience the 2021 season, and possibly Christmases to come.
The retail experience last holiday was altered by massive category and channel shifts, with increases seen in digital sales and home goods and declines in department stores and apparel spend. BOPIS, curbside, and same-day delivery exploded. Consumers got their holiday fix a little last year by shopping in the comfort of our home, checking the porch for packages, and anticipating the arrival of an entire holiday dinner, hot and ready for the table.
COVID remains an unwelcome visitor again this holiday, so retail experiences will have to continue evolving. Both retailers and consumers learned a lot during COVID and have adapted, together. Here’s what the retail team of Avtex CXperts predicts for the season ahead:
Retailers Will Make Early Preparations to Meet Consumer Expectations.
• Consumers will shop early.
Consumers have become savvy about inventory problems. They know not to wait this year when ordering that popular toy or extra toilet paper for the houseful of guests they’ve invited over. They’ll shop early to get ahead of their plans and make sure they’ve got the season covered.
• Retailers will manage demand.
Labor shortages mean retailers will attempt to push demand forward and spread it out. They’ll accomplish this through strategic and well-timed promotions to shape consumer demand peaks. They have experience with this – examples include the extension of Black Friday and Cyber Week for managing demand and CX during the holidays.
• Customer service must advance to overcome retail challenges.
The combination of inventory struggles and labor shortages has the potential to create massive reliance on customer service. Brands that aren’t hiring up in their contact centers or aren’t using the right CRM, communications, and self-service technologies, will struggle to meet their customer needs.
Category Demand Will Shift
• Experiences will be popular gifts.
Experiences — travel, entertaining, and luxury — will become more important as consumers emerge on the other side of COVID with new motivations for spending the cash they’ve accumulated from staying put for so long. Retailers would be smart to piggyback on this interest by focusing on items that are aligned with experiences, such as luggage, makeup, leisure clothing, and gifts for others.
• Retailers stock up on non-gaming items.
There’s no major gaming console in the plans for holiday 2021, so other product categories will be in greater demand.
• Retailers should have a healthy balance of owned and third-party inventory.
Owned brands will provide great value. In a potentially inflationary environment, retailers with a strong owned brand footprint will be able to manage margins and control their own production and supply chains. Companies who rely entirely on third parties for their assortment and inventory will have a harder time controlling their CX and offering great value.
Shopping Experiences Will be Blended.
• Online shopping stays strong.
Shopping online has become easier for the shopper and more accurate for the retailer, as sellers upped their game during COVID. Small businesses were forced to get online and effectively transact there. Many retailers that used third-party ecommerce platforms — such as grocers who delivered via Instacart and restaurants that conducted commerce via DoorDash — have begun circumventing those middle-men costs by creating their own native ordering platforms and delivery services.
• Online shopping must inspire.
COVID taught retailers a lot about consumers’ online expectations. Feedback and behaviors tracked over the last year indicate that consumers will tire quickly of digital experiences that are strictly transactional. The best digital experiences will engage and inspire before, during, and after the transaction. They will also seamlessly integrate with the physical experience to deliver an omnichannel experience, helping customers plan for store trips, learn about products, and interact with retailer loyalty programs.
• COVID concerns still loom.
For consumers craving an in-person transaction, COVID headwinds will remain a big unknown. Pent-up demand for physical retail may not be realized in the end. Retailers should keep a close eye on the situation and have alternatives in place to adjust in real-time.
• Customer service shines.
Given the great COVID unknown, delivering on customer service will be a challenge for retailers. This can be countered if a retailer has a strong employment brand that has helped it attract the best talent. Excellent employees will be agile and adaptive, and understand how to deliver on experiences that are aligned with the brand. These employees, especially those in customer service and the contact center, should be equipped with technology and tools to deliver optimal service, given they’re on the front lines. Contact center solutions can contribute greatly to CX. Easy-to-use self-service options for customers, such as conversational commerce, chat bots, and other digitally driven choices, will enable consumers to effectively navigate through their experiences and proactively trouble-shoot for quicker resolution to issues.
What to Expect: Pricing and Promotions
• Prices are higher.
Retailers are currently facing major Cost of Goods Sold (COGS) year-over-year increases in manufacturing, freight, labor, and shipping, which will be reflected in the price of their goods. Media coverage of price increases is creating awareness for consumers to plan accordingly when they’re checking off on Christmas lists. Because of increased price tags, promotions will resonate with consumers, but best practices in promoting must prevail.
• Personalized marketing gains in importance.
Consumers have come to expect very personalized messages delivered just for them. Personalized marketing will prompt the best return for retailers. Pushing a gift box of steaks to a vegan will be off-putting and show just how much the retailer doesn’t know its own customer. Delivering a message about yoga pants to a person who’s just signed up for their first yoga retreat will be much better received…and acted on. Personalized marketing drives profitable growth – marketing efforts and budgets aren’t wasted, and consumer loyalty is strengthened. The bad news: putting personalized marketing in place by the 2021 holidays may be a crunch. The good news: the holiday season is the perfect time to experiment, listen to customers, and start planning to hit the holiday successfully in 2022.
Season by season, smart CX planning and implementation will win-over holiday shoppers just like the perseverance that defeated the Grinch: “He hadn’t stopped Christmas from coming! IT CAME! Somehow or other, it came just the same!”
Brian Lannan recently joined Avtex from Target, where he led the Guest Experience team and was responsible for experience strategy and insights, guest-centric culture development, voice of guest, and brand and reputation insights.
