Top Five ‘Must Dos’ For Retailers to Maximize Sales This Holiday Season
The events of 2020 have drastically shifted consumer behavior, positioning this upcoming holiday season to be one like no other before for retailers. Since the coronavirus pandemic struck, individuals around the globe have been, in large part, sheltering at home and limiting their trips into the outside world.
As a result, e-commerce has exploded, and it's expected to remain popular through this holiday season, with nearly half of U.S. adults saying they are more interested in shopping online for the holidays compared to last year.
This trend extends to the CPG industry as well, with online purchases of everyday items jumping to 53% in April 2020. Further, approximately 35% of U.S. shoppers who were new to CPG e-commerce in March report they intend to continue making grocery purchases online after COVID-19 restrictions are over. Given these shifts, the path forward for retailers lays in their ability to identify and capitalize on promising digital initiatives.
Here are Nielsen’s top five marketing and CX initiatives retailers should focus on to maximize customer engagements and sales this holiday season:
Get Comfortable with Contactless
The significant declines we have experienced in store traffic are likely to continue, as coronavirus concerns keep consumers from browsing inside storefronts.
Savvy retailers have found success with contactless strategies that empower “click and collect” shopping—especially curbside pickup—which has become increasingly popular, as it allows consumers to make immediate purchases while minimizing human contact.
With this shopping method expected to increase during the 2020 holiday season by 60.4%, it’s in retailers’ best interest to make the permanent systemic changes required to engage customers in contactless strategies such as aligning online inventory with in-store availability in order to get product out as soon as customers want it.
Leverage New Moments of Engagement
Leading retailers are creating innovative new experiential moments of engagement with shoppers—most of whom have dramatically reduced in-store traffic. Nielsen has observed an increase in experimentation with store adjacent experiences (examples include drive-in movies, or “Trunk or Treat” events), in addition to new engagement approaches for tried and true events like Black Friday (examples include elongating the event dates and creating new forms of interaction that merge digital and physical retailing).
These are fantastic methods to keep retail brand awareness and to stimulate traffic in a safe way. Some retailers are also launching new subscription models or launching/re-launching loyalty programs.
Now is the time for new approaches to engaging with shoppers and creating new experiences—this is an effective tool for offsetting declines in store traffic. Yet, in doing so it is critical for retailers to capture appropriate information from shoppers in order to better adapt and adjust to their rapidly changing behaviors in this critical holiday season.
Establish Adaptable & Agile Promotion Vehicles
While companies have been shifting their efforts to online advertisements for some time, now more than ever retailers need to advertise their promotions digitally to ensure the right customers see them. This is all the more important in the coming holiday season—most retailers are preparing multiple campaigns and promotion plans with contingency scenarios galore.
The agility of digital mechanisms are a must-have this year in order to rapidly adjust promotional activity across owned websites and apps to external digital properties and activations. For example, if inventory for a key holiday item is not selling through due to lower than anticipated store traffic, a rapid digital activation can help stimulate getting the proper volumes.
As an added benefit, digital promotions are easier for shoppers to take action; as soon as they see a promotion, they can immediately click through it to make a purchase.
Personalize the Shopper Experience
Today’s consumers expect a high level of personalization within their shopping experiences. Fortunately, retailers possess many assets from which to collect the necessary data, and to activate uniquely personalized interactions.
Retailer websites, apps, and email interactions are a natural and comfortable venue for personalization efforts. Retailers have been successfully making product recommendations based on what’s already in consumers’ carts or offer coupons tailored to their previous purchases or recent searches for some time now.
It’s important these recommendations are accompanied with add-to-cart executions, as these have driven 40% conversion versus only 10% when shoppers need to go back into the website to find items manually. These capabilities are of greater importance this holiday season—when more shoppers are shopping online, a sub-par experience can quickly send shoppers to the competition who is only one click away.
Partner with Brands to Drive Personalized Sales
While one-third of brand marketers named personalization as their top focus for 2020, only 13% of marketers say their organization is fully optimized to adequately measure personalization efforts. The disconnect? A lack of quality, actionable data. What’s more, the current ROI on traditional trade spend is less than optimal.
For example, a recent study found that 67% of CPG trade promotions are actually wasted or barely break even, representing a lost opportunity for brands and retailers alike.
This creates an opportunity for savvy retailers to grow sales, but also to more fully participate in brand trade and personalization promotion budgets. Retailers who create safe, “use-case appropriate” sharing for shopper insights and targeting vehicles will experience stronger and more targeted sales growth, while also gaining outsized investments from their brand supplier partners.
As retailers navigate an unprecedented holiday season, it’s clear that there is an opportunity to fundamentally improve the shopper relationship and engagement. If history is any indicator, retailers who navigate the present challenges by creating new opportunities will emerge better equipped to secure consumer spending—for the holidays and beyond.
Jay Dennis is the head of industries & advertiser clients at Nielsen Media, heading the company’s sales and service for all advertiser & industry customers. Since joining Nielsen in 2014, Jay has held numerous executive positions within the company. Most recently, he served as the head of U.S. Retail in NielsenIQ.