In a decade full of major changes to retail strategies and business practices, the share-of-wallet war heats up every year during the holiday season. Retailers are clawing for dollars, and historically, they have looked to climb “into the black” in late November. Consumers, however, are increasingly in the driver’s seat, demanding a shift in how they want to engage. Retailers who fail to meet that demand are at risk of falling behind and losing loyal customers and market share.
While much of the 2018 holiday shopping season is still to come, early returns from Black Friday through Cyber Monday already indicate a continuing and marked shift in marketing tactics and spend, as well as consumer behavior. Consumer behavior is evolving in terms of where they’re shopping and how they are converting. In response, retailers (e-tailers, traditional/brick and mortar, omni-channel, and direct to consumer [DTC]) are paying heightened attention to and cultivating experiences for consumers that are tailored specifically to their evolving needs and expectations.
We couldn't talk about the retail experience without mention of the omnipresent Amazon. Amazon, one of the original purveyors of personalization, is increasingly blurring the lines of the day-specific promotions by pulling up deals earlier into the month. This strategy ostensibly paid back in spades, with the company posting its biggest shopping day in history.
To combat the eCommerce behemoth, physical retailers like Kohl's, Walmart, and Macy’s are doubling down on spend and extending Black Friday/Cyber Monday into 'Cyber Week'. Additionally, many are adding an incredible number of products, diversified to meet the needs of potential customers. They are effectively changing the nature of the conversion path to remove as much friction as possible from the shopping process.
This focus on the shopping experience is especially notable when compared to the consumer buying shift. While there is an uptick in overarching online consumer spend, there’s an even more notable surge in buy online pickup in store (BOPIS) activity. Consumers have the ability to purchase with a deep discount, avoid the shipping costs if applicable, and pick up at their leisure while avoiding the lines. One in four customers opted for BOPIS over the holiday weekend, blurring the lines between DTC and traditional brick and mortar experiences:
"Omni-channel retailers, or those with a physical and online presence, represented 88% of spending on Thanksgiving and Black Friday, according to the ICSC survey. Its data showed 27% of shoppers opted to order online for store pickup on those days. Among those who did, about two-thirds made an additional in-store purchase."
Retail Wire reported that retailers that operate their own stores drove a 28 percent higher conversion rate. So, while foot traffic might be down, this new blend of e-commerce/brick-and-mortar pick-up-in-store method offers the opportunity to elevate the experience once the consumer comes to close the loop on their purchase.
Another major factor, which is a continuation of years past, is the surge in mobile shopping. Once again, mobile traffic eclipsed desktop traffic for the holiday weekend, with this year's Cyber Monday being the first to have more than 50% site visits from mobile devices. This underscores the oft-talked-about need to ensure mobile e-commerce optimization in order to have a seamless conversion process from end to end. It also elevates the need to consider showrooming within paid advertising efforts, as consumers are increasingly price comparing while shopping in store.
As with other years, promotions will win during this holiday season. Free (and often fast, no minimum) shipping is absolutely a mandate for consumers - especially in holiday season. Amazon is currently offering free shipping for everyone this holiday season – not just for Prime members.
Eye on the Personalized Prize
Shifts in consumer behavior, coupled with aggressive competitors going on the offensive, underscore the need to work toward a more people-based, one-to-one approach with customers. Marketers must ensure they are targeting prospects and current customers with content that is relevant to them at any given stage in their life cycle.
These include tactics such as one-to-one display marketing, dynamic retargeting, remarketing lists for search ads (RLSA), cart abandonment/site browsing emails, mobile friendly emails, emails with considerations for image-disabled experiences, and site personalization, among countless others.
But beyond just marketing, understanding the shift in overarching behavior – and being two "clicks" ahead of it – will determine who continues to win share...and conversely, who might be next year’s bankruptcy story.