Analysis: The Great Reset — Retailers Look to Rebound, Recoup Year-to-Date Losses
There is pent-up shopping demand right now. Below are a few ideas on how retailers can capitalize on that demand to boost sales as fall arrives. But first, let’s take a brief moment to recognize that this year is like no other in retail history. All precedents have been thrown out the window. As a result, the need for clear strategy has never been more important.
Historically, significant events like Amazon Prime Day and back-to-school shopping have driven Q3 success, but the seismic shifts of this year pose unique challenges for retailers. What will this school year look like for K–12 and higher-ed students? That remains to be seen.
Also, how will Amazon’s decision to move Prime Day from July to later in the year impact retailers downstream? Our latest RetailMeNot research finds that 70% of senior retail leaders believe their organization will struggle in the third quarter without a Prime Day event.
My message, however, is not one of doom and gloom, but of seizing the moment. Off-balance retailers can shake off the doldrums and start the second half with momentum if they begin by recouping losses and clearing excess inventory from the second quarter. They’ll also need a strong promotional strategy in July and August to see meaningful results that can last the rest of the year.
In other words, with crisis comes opportunity. (A June article from Chain Store Age nails it.) This is your moment. Consider these three areas of promise as you look to bounce back in the coming weeks.
1. Help shoppers get the most for their money. People are aching to return to any type of normalcy, especially as it relates to shopping. They’re also eager to spend after locking things down for a few months. It’s critical to understand that with economic uncertainty still looming, consumers are seeking value. They need to feel confident that they’re making smart decisions as they continue to navigate this new normal.
2. Because consumers have been deferring purchases, there is now a backlog of non-essentials that they need to buy. This could be fueling the results of a recent RetailMeNot survey in which respondents say they expect to spend (on average) $25 more than last year in this 2020 back-to-school season.
Also of note: Standard clothing and school supply purchases are likely to be augmented by items unique to new virtual learning environments, such as electronics and at-home workspaces. Consider opportunities to market unexpected items that address the needs of today’s shopper.
3. Now more than ever, meet your customers where they feel most comfortable. Present them with omnichannel offerings and fulfillment options or risk limiting your base. And remember to leverage new tactics that are on the rise: contactless shopping, curbside pickup, online purchase with in-store pickup and even lockers.
As retailers embark upon this “Great Reset,” promotions will play a key part in unlocking all that pent-up shopping demand. As Forrester Research VP and principal analyst Brendan Witcher says here: “Given everything going on, I think this is such a prime opportunity for brands and retailers to win new customers.”
According to a recent Valassis survey, 46% of consumers are paying more attention to advertisements offering promotions and deals now compared to before the pandemic began. Now is the time for brands to initiate Black Friday–level discounts to incentivize, trial and win new customers. Some companies got an early start with Black Friday in July; others are running additional promotions throughout the month into back-to-school.
For our part, we created the Rebound with RetailMeNot Mega Savings Event to help brands boost sales and help consumers feel good about shopping again. The event is set for July 23–26.
After a chaotic few months, retailers must now shift focus to maximizing their recovery. Better times await, specifically for those who don’t wait to nail down their promotional strategy and clarify their messaging for a fast-changing customer base.
Lauren Cooley is senior VP of retail and brand solutions at RetailMeNot.