Part One of this holiday shopping season review was all about the numbers.
No matter how you look at the results, one thing is clear. Consumers are spending significantly more online and via mobile than ever before.
When you hear about eCommerce growth rates of nearly 20% year-over-year, you may think that the rising tide will raise all boats.
But in the hyper-competitive retail industry, that’s just not true.
Instead, some of the world’s biggest retail brands struggled to claim significant shares of holiday spending. Let’s take a closer look at 3 reasons some retailers fell short of holiday expectations.
1. Race to the Bottom Gone Wrong
Is there anything consumers love more than a great discount? In the past, price cutting was the key to consumer hearts during the holiday shopping season.
But now, consumers are will always search multiple stores and sites to find the best price. The result can be problematic for traditional retailers.
“While the retail industry has banked on aggressive discounts weeks before Black Friday and Cyber Monday to boost consumer spending, they need to make sure this does not sacrifice margins in the long run.”—Katie Smith, retail analysis and insights director at EDITED
Unfortunately, margins are getting smaller and smaller as retailers try to race to the bottom against Amazon.
Research from EDITED found 48% of all merchandise was discounted over the 2017 holiday shopping weekend at an average rate of 46% off. Compared to 44% of merchandise discounted at an average rate of 36% off in 2016, it’s clear many retailers are still trying to compete on price alone.
As we saw in Part One of this holiday shopping season recap, the retailers that compete on experiences and focus on customer conversations will dig out of this race to the bottom.
2. Unreliable eCommerce Is Unacceptable
There’s no denying the consumer shift toward eCommerce and the rise of mobile shopping. A significant spike in traffic should be an expectation and retailers have to be ready.
And yet, there were plenty of big-name retailers who struggled with website downtime or extreme delays during Black Friday and Cyber Monday—Gap, Macy’s, Lowe’s, and H&M just to name a few.
Holiday shopping is already stressful for consumers. They won’t take the time to deal with subpar eCommerce experiences. As you finish this holiday season and prepare for the year ahead, seamless retail experiences should be the primary focus.
Break down the silos within your organization, go beyond omnichannel, and engage in perfect customer conversations wherever consumers want them.
3. Attempts at Personalization Fall Flat
“Nearly 90% of organizations say they are focused on personalizing customer experiences, yet only 40% of shoppers say that information they get from retailers is relevant to their tastes and interests.”—Brendan Witcher, Principal Analyst at Forrester
There’s a clear disconnect between the money retailers invest in personalization and the success of campaigns.
It’s not that customers don’t appreciate personalization. They expect it. The disconnect is that you’re collecting so much data about individual customers and only putting it to work in email segmentation.
There’s a rush for traditional retailers to find better ways of personalizing email offers to improve open rates and engagement. But in the end, retailers eventually send emails tailored to a specific segment rather than a specific customer.
Making emails more personal doesn’t solve the larger problem in retail. To treat the disease instead of the symptom, you have to meet customers where they are. Focus on individual lifetime customer conversations and personalize within that context.
Meet Consumers Where They Are All Year Long
The holiday shopping season can make or break an entire retail year. That doesn’t mean customer conversations should begin and end between Black Friday and the end of the holidays.
Engaging with customers throughout the year will give you a more intimate understanding of what they want/need, which makes personalization much easier.
But for traditional retailers, convenient customer communication has always been a challenge. That’s why we talk so much about meeting customers wherever they are. Make is as easy as possible to interact with your brand via voice, messaging, video, chatbots, social media, etc.
If you aren’t satisfied with your holiday shopping season performance, we want to help. Check out our Retail Digital Executive’s Playbook for Conversational Commerce and see how you can reap the benefits of a 1:1 communication model.