This document provides an overview of key strategies for retailers to succeed during the holiday season, with an emphasis on mobile and social media integration. Mobile shopping and payments are expected to significantly increase over last year's holiday season. Retailers need to offer seamless omnichannel experiences and engage customers through mobile apps and devices both in-store and online. Social media also plays an important role in driving traffic, sales, and customer engagement. Consistency in branding and messaging across all channels will be important for retailers.
2. 2
3 Introduction
4 Mobile: RETAILERS AND CONSUMERS MOBILIZE FOR THE HOLIDAYS
8 Social: Building social communities that spread holiday cheer
10 Marketing: Mix it up with marketing and promotions to deliver
holiday success
11 The price wars: competing beyond price to win holiday sales
13 Loyalty: Bringing cheer to loyal customers during the holidays
14 Planning and forecasting: the foundation of holiday success
16 Personalization: shining a spotlight on Shoppers
17 Localization: holiday shoppers respond to localized offers
18 about retail touchpoints
3. 3
Introduction
The buzzwords for the holidays are similar to what retailers are hearing year-round in today’s
marketplace: customer service, cloud, cross-channel, social and mobile. But how these tactics
are implemented as part of holiday strategies can make or break the season for many merchants. In a presidential election year, holiday revenue is affected
by the campaigns and the outcome. “I expect holiday
“The big realization that many brick-and-mortar retailers have come to (many belatedly) is that
sales to be up 3% to 4%,” noted Greg Buzek, President of
the cloud and the store are not separate checkouts,” noted Gary Schwartz, President, Impact
Mobile. “The consumer is checkout agnostic. The consumer is channel agnostic. To succeed in IHL Group. “But it will likely be the higher level if Romney
the 2012 holiday shopping season, retailers need to use mobile to engage in store and move wins the general election, the lower if Obama wins. An
the shopper into their cloud or engage in the cloud and drive door-swing. If the retailer cannot interesting component to all of this is what happens during
effectively clientele using mobile in the store, if the retailer cannot capture the mobile number the lame duck session of Congress. There are a lot of huge
opt-in at POS, their shopper will be poached by Amazon or, worse yet, simply abandon intent.”
tax components that expire at the end of 2012 and will likely
The fast-moving social media environment also will take retailers for a ride during the holidays. not be dealt with until the elections. The expiration of the
“Given how quickly social media has been adopted, how many channels are popping up, Bush Tax cuts will have a big impact on spending; the lack
seemingly daily, we believe the opportunities for retailers will increase this year, along with the of long-term AMT tax will also have an effect. This could go
competition for consumers’ attention,” noted Michelle Crames, Founder and CEO, SkuLoop. either way based on what happens in early November.”
Industry experts are predicting some of the traditionally popular retailers, such unveiling deals over time. And Best Buy and Walmart drove tremendous traffic
as Nordstrom, will perform well again in the 2012 holiday season, but they also through door busters.”
are watching some innovative moves from other retailers. “I’m pretty bullish
on Nordstrom at the moment,” noted Paula Rosenblum, Analyst Partner, Retail Retailers committed to cross-channel consistency also are receiving high marks. “A
Systems Research (RSR). “The company resisted any urges to start promoting the few retailers are doing a very good job,” Rosenblum said. “I think JCPenney was
holidays before Thanksgiving, and has been very good at managing inventory, doing well even before the Johnson era (new CEO). REI is a legend in this regard.”
while recording great same store sales and earnings.”
Asked for one important piece of advice for retailers, Rosenblum said: “Don’t make
“Sephora had a great number of unique items for the holidays last year,” noted promises you can’t keep. If your web site tells the consumer the product is in-stock
Crames. “I also believe Macy’s created and sustained excitement (last year), in the store, or doesn’t explicitly say it isn’t, then the product better be there.”
4. 4
Consumers have put the pressure on retailers to prepare for the mobile double from last season. However, its biggest impact will come not only from
revolution. Some staggering statistics confirm that mobile is the place to be. its role as a revenue stream but additionally as a companion channel for
On Christmas Day 2011, for example, consumers increased mobile shopping store shoppers. Customers will be trolling the aisles of their favorite stores while
by 173% over the previous year, according to the study titled: Google Post looking at their phones; they’ll either be looking at that store’s app or mobile
Holiday 2011 Takeaways. Additionally, 12% of online visits to a retailer’s web site for that retailer’s product and pricing information, or at a competitor’s.”
site came from a mobile device during the 2011 holidays, a 5% year-over-
But while scrambling to prepare for the holiday rush, retailers must be
year increase.
careful to maintain their consistent brand message when launching
Mobile has a few distinct meanings when it comes to retail: mobile mobile strategies. “Many retailers are struggling with a consistent brand
commerce and mobile payment are making the most noise, as the experience, especially in the mobile environment,” noted Lynly Schambers-
increasing number of smartphone owners express their desire to shop and Lenox, Group Product Marketing Manager, Digital Publishing at Adobe.
buy via their mobile devices. In-store, retailers are arming their associates “Mobile marketing professionals need to understand the emerging roll of
with both smartphones and tablets in order to save and boost sales by a tablet application and how it can reflect and enhance a brand while
providing a better customer experience. building a bridge across other retail channels. And, yes, this is very important
for the upcoming holiday season when consumers are bombarded with
“More of Christmas 2012 will be rung up on mobile devices,” noted Buzek,
messages from a variety of brands.”
“and retailers are scrambling to get their tablets and mobile devices
ready. There is a great desire to get there Industry experts agree that mobile likely will be the differentiator between
in time. It will be interesting to see what retail winners and losers during the 2012 holiday season. “Consumers will
happens with lines: Will it be mass chaos, expect a higher level of engagement via mobile this holiday season,” noted
where it looks like a museum with tour Simon Salt, CEO of International IncSlingers, “so all strategies should include
guides as groups of people flock and follow ways for consumers to interact with the brand via this medium — whether via
particular sales personnel?” QR codes that provide additional product information, apps that allow faster
checkouts, Augmented Reality to extend the environmental experience for
“Mobile commerce will be showing the
the consumer, or SMS campaigns to provide timely and relevant offers. Brands
biggest year-over-year growth of any
that execute well will find a much higher level of engagement with their
channel,” added Larry Freed, President of
customers and prospective customers.”
ForeSee Results. “We expect it to at least
5. 5
Mobile Payment:
While providers are scrambling to develop and implement mobile payment solutions, the technology is only slowly making inroads in the U.S. Retailers that
offer an easy-to-use mobile payment solution in time for the 2012 holidays will have a long leg up on the competition. “If consumers’ phones have the
capability to provide them with a seamless checkout experience, they’ll expect it to be leveraged by their favorite brands,” noted Salt. “If it is not, a new
favorite will be found.”
Some recent mobile payment implementations that have seen significant success include Google Wallet, Isis, Starbucks’ internally created solution and Home
Depot’s partnership with PayPal. “Mobile is making the biggest impact on payment and the overall retail experience, is redefining in-store POS, and clearly
is the largest catalyst for change,” noted Andrew Morris, Director of
Market Platform Dynamics, in a recent Retail TouchPoints Mobile
Payment report. “In fact, mobile technology is changing the entire
way we think about payment. This redefinition of in-store POS is
happening quickly: already there are scores of retailers using iPads for
Traditional retailers can no longer deny the impact that Amazon has
in-the-aisle purchasing capabilities and clienteling, or implementing an
wrought on the retail marketplace, and they need to be armed and ready
‘Apple store model’ for store associates.”
to compete with this retail behemoth in order to come out on top when the
Industry experts speculate that mobile payment could be one, two or dust settles in January 2013.
three years from saturation in the U.S. “Mobile payments won’t reach
“During the 2011 holiday season, Amazon offered consumers $5 in
critical mass in 2012, but may by holiday 2013,” noted Rosenblum,
exchange for scanning in-store items and comparing the price on
Retail Systems Research (RSR). “Retailers are starting to embrace, at
Amazon,” said Crames. This offer took price off the table when it comes
least in some small part, the newer technologies such as Near Field
to differentiating a brand. “Since retailers know that price comparisons
Communication (NFC),” added Salt. “We are
are happening more frequently in their stores, they must invest to make
seeing NFC being adopted by vendors as varied
their multi-channel experience better, and to make the experience more
as the New Jersey Transit Authority and The
exciting for customers.”
London Underground to retail establishments
such as Trader Joe’s and RadioShack. The “Retailers can not sit back and wait for competitors like Amazon to win
increasing integration of mobile-based payment customers right from within the aisles of their own stores,” added Dave
systems and the potential move toward virtual Bruno, Director of Commerce Studies for RedPrairie and Editor of Commerce
stores we are seeing in Asia are certain to have In Motion. “Engaging, personalized content delivered to shoppers on their
an impact in the U.S. in the very near future.” smartphones is a must-have capability for this holiday season.”
6. 6
HauteLook has developed a loyal following of deal seekers and fashionistas due to the experiences those shoppers expect via smartphone and tablet. For
its promise of curated assortments, home goods, elite experiences, and designer example, during the 2011 holidays, HauteLook created special sales and
clothing and jewelry at highly discounted prices. curated assortments consisting of the “perfect gifts” for family and friends,
based on that feedback.
Although HauteLook drives shopper engagement across email and social
channels, mobile has become a vital asset to HauteLook’s success. This is “When it comes to mobile apps, one size doesn’t fit all,” Bettinelli said.
especially true during the highly competitive holiday season: During Black “Smartphone and tablet apps are used in different ways and shopping
Friday 2011, the eTailer experienced a 700% boost in purchases made by contexts, so we’ve tailored each of these app experiences. However, we are
smartphone, while purchases via tablet increased 200% the same day. always looking to engage our members in new and exciting ways, so we’ll
continue to explore opportunities for mobile-only promotions and events.”
“Mobile quickly has become a key part of HauteLook’s business,” said Greg
Bettinelli, CMO for HauteLook. “Our members generally are on-the-go, so Since its inception in 2007, HauteLook has developed a reputation as a
our iPhone, iPad and Android apps are a crucial part of our business. We’ll primary outlet for top fashion, the most coveted lifestyle brands, and elite
definitely see an uptick of mobile usage during the busy holiday season. We experiences, at up to a 75% savings. Sales are launched every day at 8 a.m.
also are seeing that our members are shopping from their mobile apps while PT, and reminders are sent via email
at home.” and push notifications before events.
As of May 2012, mobile represented up to 25% of weekday logins and 35% of
those on weekends. Additionally, nearly 20% of weekday revenue and 30% of
weekend revenue came from mobile.
Currently touting more than 700,000 smartphone and tablet app
downloads, HauteLook has streamlined the mobile browsing and buying
experience based on its target customers’ mobile behaviors, as well as
7. 7
Mobile was a key asset to HauteLook’s 2011 holiday success. However, the eTailer utilizes multiple strategies across channels to boost
basket size and optimize loyalty initiatives. Greg Bettinelli, CMO for HauteLook, shared further insight on the must-haves for this holiday
season and beyond, as well as some best practices for e-Commerce, mobile and more:
1. Keep It Simple: During the hectic holiday season, consumers want to get their shopping done as quickly and seamlessly as possible.
Whether it’s via mobile, social or e-Commerce, retailers must implement a straightforward user interface that is easy to navigate. For
example, HauteLook leverages a “Find It Fast” feature, which allows shoppers to sift easily through inventory based on size, price range
and item. Moreover, the eTailer securely saves account holders’ credit/debit information, ensuring seamless purchasing processes via
desktop, laptop, tablet and smartphone.
2. Develop Consistent Branding: As shoppers continue to consult the web and social networks to finalize buying decisions, it is becoming
more imperative for retailers to keep branding consistent. Merchants must deliver streamlined messaging across all member, brand and
internal touch points, including the web site, mobile apps, social media channels, emails and all other member-facing assets.
3. Mobilize, Mobilize, Mobilize: The success HauteLook experienced via mobile during the 2011 holiday season is no longer a rare
occurrence. The continued adoption of smartphones and tablets has offered retailers a new opportunity to market to and build
conversations with shoppers in a more direct way. As a result, it is vital that mobile
apps are easy to use and navigate, and are reliable during all shopping trips.
Moreover, the mobile experience must be fun as well as personalized to shoppers’
unique wants and needs, based on consumers’ past browsing and buying activity.
4. Stabilize The Site: Black Friday, Cyber Monday and other notable holiday sale days
lead to daunting spikes in traffic. Retailers must ensure that e-Commerce sites and
mobile apps can operate during these high-demand periods. Additionally, merchants
must be wary of adding “bells and whistles” that may compromise site loads and
increase likelihood of crashes, which will frustrate shoppers and veer them off course
from completing purchases.
8. 8
More consumers are accessing social networking sites to gather input from recommend items. However, this holiday season we’ll start to see more
family and friends before they buy. Knowing this, retailers can use compelling retailers tapping into the other strategy, which is using social channels to touch
calls-to-action and messaging to tap these behaviors to drive click-throughs, base with their customers and garner more insight on their behaviors and
comments and shares via social media. This approach will be particularly preferences, such as providing the ability to review items or comment on a
valuable during the busy and competitive holiday season. blog post or YouTube video.”
A recent study from RichRelevance has revealed the profound impact social Rosenblum reaffirmed the growing importance of social media, especially
sites make on purchasing decisions. Facebook’s influence on retail shopping when used in conjunction with mobile devices. “Social/Mobile is going to
traffic grew 92% from 2010 to 2011, according to the company’s “Online be even bigger this year, especially for smaller retailers,” Rosenblum said,
Consumer Report.” Moreover, although shoppers who link to retail sites from “Especially for smaller retailers. They have recognized that social/mobile apps
Facebook and Twitter are less likely to make a purchase, with average are one way to ‘get their names out there.’”
conversion rates of 1.2% and 0.5%, respectively, the average order value is
SkuLoop, a digital promotions solution provider, helps retailers develop wish
far greater on these sites than standard search via Google, according to the
list applications that enable customers to register for and share their most
report. In fact, shoppers using Twitter had the highest average order value
coveted items across social channels. When linked to Facebook, these lists
($121.33) of all shoppers, while Facebook browsers had an average order
and their updates automatically are published to consumers’ personal pages.
value of $102.59 (versus Google’s $100.16).
Since Christmas 2011, approximately
Social media has played a starring role in the new engagement paradigm, 19% of SkuLoop’s clients’ fans tapped
allowing retailers to drive loyalty and one-on-one communication with into its “Wish List” tool when it was
brand advocates and followers. However, social will become even more combined with other viral features,
paramount this holiday season to driving loyalty and purchases, according to including the ability to see friends’ wish
Andrea Morgan-Vandome, VP of Retail Strategy and Solution Marketing for lists, according to Crames.
Oracle Retail.
“Retail executives have seen two effective ways to use social media,”
Morgan-Vandome said. “One is to use social as if you’re interacting at a
cocktail party. This strategy allows customers to talk to each other and
9. 9
“Through Facebook and our Wish List app, we are able to
correlate demographic and geographic information to
specific products,” Crames said. Since last year’s holiday
season, Facebook has rolled out Timeline and also revealed The holiday season is a prime time to generate a loyal following via social media. However,
plans to implement more dynamic actions to join the “Like” many retailers are missing the mark on creating meaningful conversations with shoppers
tool, such as “Watch” and “Buy,” among others. “These across Facebook, Twitter and other sites. Following are tips and tricks to drive shopper
strategies will help merchants spread the word in a more engagement during the holidays:
exciting way.”
þþ Embrace the latest social trends: Pinterest and Instagram are among the newer
By driving dynamic and memorable interactions via social sites that allow merchants to create a face for their brands as well as offer
Facebook, Twitter, Pinterest and Instagram, retailers consumers a behind-the-scenes look at company promotions. Use Pinterest to
can obtain in-depth data on customer sentiment, create holiday must-haves for customers’ friends and family, or take pictures of store
overall brand loyalty and engagement, and other vital events and share them via Instagram.
information that can contribute to future cross-channel
holiday marketing initiatives. þþ Think beyond batch-and-blast specials and bland status updates: Post pictures and
lists of this year’s hottest gifts, and release holiday-themed music mixes to spread the
“A lot of retail leaders are looking at social information and holiday cheer and encourage re-shares.
using it in their planning processes for future campaigns,
such as during seasonal changes,” Morgan-Vandome þþ Start the conversation: Asking questions is an optimal way to build social dialogue.
explained. “Now merchants also want to integrate social Rather than shouting marketing messages and announcements to followers,
information into their CRM solutions to better shape the generate more intimate communications with consumers by asking about their
customer experience across channels.” fondest holiday memories or favorite gifts.
Morgan-Vandome added that more retailers will be þþ Get local: Best-in-class retailers are tapping into
guiding store associates on how to access and analyze social media to spread the word on local events. NICE
online ratings, reviews, blogs and other social content to Use Facebook, Twitter and Instagram, among
help them be more informed about target customers and other sites, as an outlet to promote location-
their preferences. “This is what I call ‘lowering the barrier to specific sales, parties and other happenings,
sales,’” she said. “I think we’ll be seeing a lot more of this and update consumers throughout the day to
strategy during the upcoming holiday season.” generate more conversations. This tool also is
useful for advising local shoppers of their area
stores’ holiday-specific shopping hours.
10. 10
Marketers need to be on their toes during Holiday 2012: Doorbusters, limited- A group of industry experts offer a variety of marketing tips for retailers this year:
time sales, daily deals and uncertain pricing scenarios are challenging retailers
Paula Rosenblum, Retail Systems Research: “As much as I hate to see it, I
ü
to be ready to launch a new promotion at a moment’s notice. “Retailers should
expect the doorbuster trend to continue. I think all eyes will be on JCPenney,
have an arsenal of promotions in their hip pockets in case they don’t perform as
to see what strategies the company puts into place. It will be hard pressed
desired,” said Lauren Freedman, President, the e-tailing group. “They also need to
to resist the doorbuster crack, but I believe the company will. If results are
test tactics prior to the holiday season and get creative with promotions to avoid
positive, hopefully this will be the last year of this very ugly phenomenon…
the ‘me-too’ syndrome.”
otherwise it will continue to ratchet up….and we’ll be talking about Christmas
To combat the fierce competition, some retailers are thinking outside the in July.”
box. One of them is Office Depot, which will use video to support its holiday
Gary Schwartz, Impact Mobile: “Be sure to combine paper and mobile
ü
advertising initiatives. “During the holiday season, brands are constantly releasing
advertising — and pay attention to percentages. According to various
limited-time sales and special promotions, so it is important to ensure our ads
research data from Flurry, ComScore, VSS and Alexa, retailers and brands
have up-to-date information,” said Nicole Fraley, Director, e-Commerce growth
spend 29% of their budgets buying print when consumers’ time spent here
initiatives for Office Depot. “The real-time, dynamic nature of videos, specifically
has dwindled to 6% of their day. Retailers spend 1% of their budgets on
SmartVideos from SundaySky, gives us the means to generate videos rapidly and
mobile media although it occupies 23% of our consumers’ attention.”
cost-effectively to support fluctuating price points, holiday deals and last-minute
offers. These personalized videos Dave Bruno, Commerce In Motion: “Now more than ever, retailers are
ü
allow us to deliver a better user ready to truly embrace new devices, channels and networks for marketing,
experience that increases customer promotion, and customer engagement. I expect to see a wave of new
loyalty and return on investment.” additions to the marketing arsenals of retailers in almost every category —
from apparel to electronics to grocery.”
Andrea Morgan-Vandome, Oracle Retail: “Some retailers are working
ü
towards making the shopping experience more interesting — focusing on
targeting assortments or recommendations and promotions to specific
customers. The holiday season obviously is a highly promotional time. We
think this year we’ll see the continuation of a promotional aspect, but retailers
will be much more focused on how to reach different types of customers. “
11. 11
The continued shift to cross-channel browsing and buying has greatly impacted Results from the RSR research report, titled “Retail Pricing In A Post-Channel World,”
how and from where shoppers purchase items and receive information. reveal that retailers find the following to be the “top three strategic pricing
business challenges:”
The Internet ignited the birth of price-comparison shopping. However, the
increased competition for customer attention and dollars has intensified
Increased price sensitivity of customers 67%
due to the continue proliferation of smartphones. Consumers now can price
compare with their mobile devices while in store aisles, either via mobile web
Increased pricing aggressiveness from competitors 51%
or price comparison apps.
In fact, approximately 41% of consumers indicated that they have compared Increased price transparency - the impact of comparative price shopping 47%.
prices in-store then purchased from another retailer’s physical store, according
to the “Prosper Mobile Insights Mobile Survey, December-11,” a study co-
released by BIGinsight. Moreover, nearly 26% of shoppers compared item
prices in the aisle then purchased from another retailer’s web site via a
smartphone or tablet.
Due to the influx of information, deals and offers available via web-based Retailers need to hone their competitive skills as they strategize for
and mobile tools, accurate and competitive pricing will be paramount for the 2012 holiday season. Lauren Freedman, President, the e-tailing
success this holiday season, according to Crames. group, offered the following 4 tips: Retailers should have a…
“The competition for consumer attention will intensify, especially because flash ü reater focus on an omni-channel strategy
G
sales, curated events and other commerce models have trained consumers
Keener lens on how to compete against Amazon and
ü
to expect something new every day,” Crames said. “The prominent tools for
well-heeled retailers
breaking through the clutter during this holiday season unfortunately will be
very driven by price. However, retailers can start to engage their audiences Sharper look at their pricing scenarios
ü
on different dimensions beyond price well before holidays to capture and
ü ommitment to continuing to improve logistics
C
build excitement that will flow through holiday purchases.”
12. 12
Shoppers are more eager and willing to hunt for deals by searching on the Retailers also can ensure customer loyalty during the holidays by implementing
web, Amazon, eBay and other discount sites to ensure they’re making optimal consistent pricing and merchandise availability across channels. This consistent
purchase decisions. But the competition is heating up, with some sites offering journey will enable consumers to make educated decisions and in turn, have
additional discounts to incentivize consumers to complete purchases. more pleasant shopping experiences.
When its price comparison app was first released, Amazon offered a $5 “Overall, I think retailers are doing well at creating consistent brand messaging
discount to consumers who scanned and compared items then purchased across channels,” Freed said. “However, they are less consistent on pricing
through the app. This strategy will come to the forefront this holiday season, strategy and product selection. From a retail perspective, I know they are
leading to increased price cuts among retailers, according to Salt. “I fully trying to optimize channels by offering different selections and prices online
expect Amazon and potentially others to repeat the holiday season price than they do in stores — sometimes they have to be more competitive online
cutting from last season,” Salt said. “While this behavior is not sustainable, than in a retail location. But when I go in a store and see a product for $50
it does drive consumers away from traditional retail and make them more then check the same company’s web site and find it for $40, it is confusing for
price sensitive.” me as a consumer.”
To combat the continual rise of price comparison strategies, Salt recommends
that retailers focus on differentiating the brick-and-mortar experience
from their online competitors. “Retailers must improve the in-store browsing
experience, which is not easily replicated online,” he said, “and increase the
sense of personal service from in-store staff.”
13. 13
Today’s digitally empowered consumers value engagement from their preferred retailers and brands, and
will remain loyal to those that deliver a personalized approach. Data analytics can help retailers better
understand and respond to this consumer segment. “The smart retailer will focus all its energy on capturing
loyalist opt-in and hyper-target this demographic with tailored
messages,” noted Schwartz.
Data collection also can assist in pricing decisions. A benchmark
As retailers continue to roll out mobile technology within brick-and-mortar stores,
study by RSR Research discussed the importance of Retail
particularly in advance of the holiday shopping surge, they also must educate consumers
Winners, defined as those whose year-over-year comparable
on these new services. Buzek believes retailers who do not instruct consumers on how to
store sales outperform inflation. More than half (62%) of Retail
use mobile devices to assist in the shopping experience will see a decline in sales.
Winners are collecting data from new channel promotions and
using it to make better pricing decisions. “I suspect there will be more CRM offerings that include Facebook and Twitter accounts
as part of the registration process, which will be done through special promotions,” Buzek
RSR’s Managing Partner, Paula Rosenblum, shared with Retail
said. “Retailers would be wise to take advantage of this process now to gather information
TouchPoints best practices for retailers planning to deploy a
from their customers and begin combining it with internal CRM data.”
customer loyalty program. “Get your cross-channel houses
in order, and focus on customer services and experiences in The biggest change in strategies compared to last year’s holiday season will be in specialty
your stores,” she said. “Our data tells us that Retail Laggards stores and the store experience. Buzek added: “As specialty retailers move to mobile
worry about the competition, while Retail Winners focus on assistance and checkout, customers unfamiliar with this new way of shopping will need to
their customers.” adapt quickly.”
Focusing on the customer experience is critical for retailers. Buzek predicts this holiday season to be heavily focused on mobile devices. “Retailers
Seemingly, “an engaged customer will be far less likely to walk are scrambling to get their tablets and other mobile devices ready for the holidays,” he
out of the store and buy elsewhere,” according to Rosenblum. said. Both during the holidays and throughout next year, “it will be interesting to see what
happens with lines, and whether there will be mass chaos as groups of people flock and
follow mobile-equipped sales personnel to complete purchases.”
14. 14
The holiday season is a prime time for brands to release new, must-have As customers continue to become the focus of inventory decision-making,
items for consumers. By utilizing customer-centric planning and forecasting retailers must have customer-centric processes to avoid promoting and
strategies, retailers can optimize inventory and assortment to decrease out- distributing items that don’t align with their target audiences. By tapping into data
of-stocks on high-demand items and eliminate excess inventory during this across channels, retailers can receive actionable insight on consumers’ most
holiday season. desired items, colors and designs, leading to more efficient inventory planning.
“Ultimately, the amount and quality of retailers’ inventory plays a huge role in
their success,” Freed said. “We typically see it having a big impact on the
customer experience during the holidays, as it will again this year.”
Economic uncertainty and the growing influence of price on customer
Greg Buzek, President, IHL Group, emphasized that retail companies must be
purchase behaviors persist on deepening that impact. In the report
specific and focused in how they approach 2012 holiday strategies. He offered
titled: The New Imperatives of Retail: Forecasting 2.0, RSR Research
suggestions in three areas:
reported that “Uncertainty continues to be the watchword for critical
holiday seasons, both for the total spend consumers will commit to, as well 1. If mobile checkout is part of your strategy, make sure you have a strong
as which products will reap the benefits.” plan for how to deal with excess shoppers. You had nice organized lines
previously…what happens to your store layout, to your customer service style
In response, best-in-class retailers are implementing enhanced assortment
if you move to mobile checkout?
planning and merchandising solutions to garner insight on customer purchase
history, preferences and behaviors to make better inventory decisions. 2. Take advantage of your cross-channel opportunities. Plan for it
According to Aberdeen Group’s report, titled: Mission-Critical Merchandising promotionally, plan for it on execution.
and Replenishment, 39% of merchants are planning to establish their ability
3. Include social media in your marketing efforts. Make a dynamic coupon that
to develop “what-if” scenario-based merchandising plans for assortment,
can be tracked available due to a “Like” on Facebook or Twitter. Tie the
allocation, markdown and space optimization.
Facebook name to the coupon ID in some way so you can begin to link that
with your back-end loyalty systems.
15. 15
“We’re seeing more retailers focusing on all channels when they start However, some retailers are not focusing on making all merchandise
their planning processes,” Morgan-Vandome said, “Previously, they available in stores and across digital channels, which is imperative
may have taken an isolated approach, but now retailers are looking to for success, according to Crames. “Right now, many of these
better understand how consumers shop from one channel to another. channels are siloed, with e-Commerce sites running as separate
That way, if something is being purchased online, they can learn how storefronts,” she explained. “This is hard to manage as an
to roll that into store planning.” organization because mobile and social span across these units, and
force new ways of orienting around the customer.”
Retailers also are utilizing more detailed factors, such as weather
and social sentiment to optimize merchandising during the holidays. Rosenblum also indicated the low adoption of distributed order
“Some retailers are trying to understand what people are saying management and cross-channel fulfillment. Although these strategies
from a social perspective and including it in decision-making for are highly prized by retailers, few actually have the tools and
assortment,” Morgan-Vandome explained. “This is still very early in the technologies to leverage them efficiently, she reported. “Having said
process, but we’ll see retailers move in that direction and include it in that, we fully expect retailers to do whatever they can to get product
their customer experience.” into the customers’ hands,” she noted. “No one wants to see a repeat
of what happened to Best Buy during last year’s holiday season. That
More than half (51%) of retailers are seeking to achieve a “greater
means it’s imperative to treat inventory
balance between local micro-merchandising and chain-wide
as a shared resource across channels.”
assortment needs across all channels,” according to Aberdeen
Group research.
16. 16
Chalk it up to the proliferation of technologies and devices, and a fickle Crames added: “We also believe that the acceleration of deals and
consumer mindset — shoppers expect relevant, meaningful interactions, corresponding deal fatigue will make retailers have to work harder this
and retailers are ramping up their initiatives to get more personal with holiday season.”
customers. During the holiday shopping season, it will be more critical than
Aberdeen Research pointed to the following action items that retailers are
ever for brands to stand out in the crowd of stores.
implementing to optimize personalization initiatives:
Particularly due to the breadth of information consistently available to
today’s consumers across a wide variety of channels, customer loyalty and
retention have become harder than ever to encourage. The top pressure
driving retailers to personalize the shopping experience is the increase
in customer research prior to a purchase, cited by 36% of respondents
to the March 2012 Aberdeen Research report, Hyper-Connected Online
Retail Personalization. Between their smartphone apps, daily deal sites and
discount e-Tailers, shoppers really don’t need to frequent one particular
store unless they see a clear value proposition.
A key element of current retail strategy conversations is how to develop
ways to use technology to differentiate the customer experience. Half
of the U.S. web e-Tailers in the 2011 edition of Internet Retailer’s “Top 500
Wine.com recently launched a personalization and recommendation
Guide” said they were using personalization on their e-Commerce sites, up
initiative to present more relevant offers to its online shoppers. Customers
from 32.6% of retailers that reported doing so the year prior.
who log into the site receive unique recommendations based on their
“We believe retailers will work to create more personalized and targeted recent purchases, product searches and purchases made by customers
promotions,” noted Crames. “And there is an opportunity for them to deemed similar to them. Shoppers also have the capability to personalize
connect with groups of consumers effectively using technology and their own profile pages, complete with a picture; recent site activity
social media to engage audiences and develop and build relationships such as product reviews and searches; and wine club and Steward-Ship
with consumers.” membership information. The eTailer also added a one-click checkout
feature to streamline the shopping experience.
17. 17
By initiating a localization strategy, retailers can present special offers and events Progressive retailers also are implementing solutions to analyze customer
relevant to the local environment and shopper. During the holiday shopping data points, including income, point of sale data and web searches to target
season, the in-store experience is even more integral to revenue optimization. promotions at a highly specific demographic of potential buyers. This strategy is
particularly effective during the holiday season.
Though a key priority for retailers, localization remains a critical challenge,
according to a recent study from RSR Research. More than half (53%) of survey Retailers also are migrating to social and digital channels to provide
respondents reported localized assortments as critical to their company to some localization opportunities. “Interestingly, mobile seems to be making the
degree or another. Presenting localized offers is truly a must-do for retailers, biggest positive impact on the smaller retailers, who can get their messages
according to industry experts. out to the public for relatively short money, in a pretty intimate fashion,”
Rosenblum said. “That’s why Facebook pages, FourSquare and other vehicles
One of the most effective ways to deliver personalized offers is to shoppers’
are important: They get really local. I think consumers actually are rooting
smartphones. “Retailers must be able to deliver localized content, location- and
for the smaller retailer, and if that retailer can catch their attention, and be
customer-specific offers, enterprise-wide inventory, and rich product content to
reasonable on price, there’s a lot of opportunity.”
the smartphone of every shopper before, during and after they enter the store,”
noted Bruno.
Store-based retailers are rolling out localization strategies
ü
with the knowledge that these programs can be very
Both small, regional retailers and large, national brands are taking advantage of localization strategies.
effective traffic drivers;
Sears recently launched SearsLocalAd.com, an online service designed to provide customers with access
to additional local deals beyond its web offers and weekly Sears print circular. The online shopping portal is
Localization is a tool that store-based retailers are using
ü
dedicated to local customers, allowing them to shop smarter by previewing new local deals updated every
to differentiate themselves from the more convenient
week, and includes enhancements for Sears’ Shop Your Way loyalty program members.
shopping options provided by e-Commerce players;
Localization is pre-selected based on the shopper’s location and can be changed to another store within
the experience. Shoppers can search their nearest Sears store and browse deals by department, brand Most importantly, localization transforms the perception
ü
or price point, and filter it to find offers of interest. SearsLocalAd.com helps shoppers ensure products are of a store from a cold, money-hungry national retailer
available before they go to the store. The web site also shows in real time how many items currently are in into a community store.
stock at the chosen location. (Source: Sean Deale, Retail Industry Analyst at RetailNet Group LLC
“5 Ways Chain Retailers Are Localizing Their Stores”)
18. 18
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