How can retailers win this holiday season?
For all retailer brands alike, the fourth quarter brings a frantic sprint to year-end. As we enter the first holiday season post lockdown, brands and retailers face the daunting task of annualising a record year of online sales, that was elevated by the lockdown. Has enough been done to prepare for the new normal? How can brands adapt to win this holiday season?
The new normal brings new demands
The shift to sales online is no secret, and new shopper behavioural patterns have emerged that have disrupted the sector. This is set to stay throughout the holiday season and beyond, and they have been illustrated by several trends such as the hybrid working policy and imbalance of supply and demand. The hybrid working policy has gained widespread adoption post lockdown.
Brian Chesky, the CEO of Airbnb, identified this new hybrid policy has resulted in ‘workcations’, which means that consumers are now favouring long-term stays, without having to take time off work, and this will be a big growth opportunity for the company this holiday season.
According to Bridgewater Associates, these shifts in demand are “creating an imbalance of a magnitude that we haven’t seen since the 1970s”, but the supply of goods is not the issue. It is the demand that has exploded post pandemic. Chinese production is 20% higher when compared to pre-pandemic levels and exports 40% higher.
Changing demands requires new learnings and playbooks
It is clear brands need to focus their efforts on building a strategy that identifies and adapts to changing consumer behaviour. What are the three drivers of maintaining growth during this holiday season?
1. Build an organization that is future proofed
- Firstly, hold regular future planning sessions to identify emerging trends
- Bring an outside in perspective to cover all bases and to inspire the visionaries
- Co-create and prepare for what the future may look like
Building an organization that’s prepared for change, and a culture that’s ready for anything increases the probability of beating your competition who aren’t ready, waiting, or worse, willing to change. This could be quickly adapting to new restrictions over the holiday season or understanding how sales can bleed into the new year, through devising a thorough promotion plan for your online and in-store commerce. An example of a brand that anticipated change, and adapted rapidly, is Netflix. By 2008 Netflix reached $1 billion in revenue delivering physical videos on tape and CD to homes. However, by the end of 2012 CD shipments were dropping as streaming viewership was exploding. Netflix recognized this change early on and adjusted its business model in 2013 to launch a market leading streaming business.
2. Set up a data-driven marketing function that’s ready for the next phase
In the past, business decisions were largely based on risk analysis, but as the pace of change has accelerated and sales have shifted online, we must embrace that business decisions will be based on a hypothesis led approach. Therefore, a robust ‘test & learn’ programme that is integrated into your annual planning process will allow for iterative optimizations. Make ‘test and learn’ business as usual, from start to finish, and not just as an afterthought. And centre these experiments around business objectives that are linked to a ‘learning agenda’. By applying a test and learn model to your marketing campaigns, you can improve every aspect of brand performance with data-driven insights. Research from Econsultancy on optimizations experiments shows that “more than nine in ten (91%) expect to increase the number of experiments they run over the coming 12 months.” As well, Gartner’s survey analysis has shown that organization that significantly outperform their competitors are almost twice as likely to make testing and experimentation a marketing priority.
3. Winning across the commerce landscape
Consumer expectations are always growing as the access to products and services is easier than ever before. And the consumer journey is only set to become more complex with the increasing number of apps and virtual realities that seek our attention. Leading companies will need to use data and technology such as Adobe Audience Manager, or Salesforce Datorama to gain a holistic view of shopper touchpoints. This will help to plan and execute an omnichannel strategy that will provide a seamless experience and offer shoppers the option to purchase items just about everywhere. For example, Asia uses technology to drive livestream shopping to great effect, and we are now starting to see other markets such as the USA adopt these experiences.
During Halloween, Heinz ran a shoppable campaign on their branded website and became one of the first major brands in the United States to sell directly to consumers via a large-scale livestream event. This shows how brands can cleverly widen the path to purchase over the holiday season, to not only find new ways to engage consumers but help drive overall online conversion through to the new year.
As the story unfolds for this holiday season, the stage will be set for 2022. To win this holiday season and beyond, brands should build an agile team that’s proactive to ever-changing shopper demands, which is built upon a robust Test & Learn programme. They can then use data and technology as an enabler to drive engagement and conversion along the path to purchase. Brands and retailers that consider these points from planning through to execution are set to meet the changing demands from the shoppers and outperform the competition.
Yoshi Kurihara, senior marketing consultant at Frog, part of Capgemini Invent.
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