Deck the Halls: Retailers Gearing Up for Holiday Shopping
With only a few months until the busiest shopping time of the year, savvy retailers are polishing their strategy to have a successful holiday season.
We’re in the dog days of summer with the Mercury rising to temperatures that leave us wishing for a cold front to give us some respite. As many customers wait in line for refreshing cold drinks and trade their high heels for flip-flops, the holidays seem very far away. It will be months before we hear the notes of the first carol playing on the radio but for retailers the holidays are just around the corner—at least when it comes to planning. In fact, many of them started ironing out their holiday plans months ago, just days after wrapping up the last holiday season. Before the decorations had been put away, forward-thinking business leaders started looking at the successes and failures of the previous weeks, and outlining their plan for this year.
While the holiday spirit and sales will entice customers to part with their hard-earned cash, this is really the season to rev up customer service. It’s essential to invest in stellar customer service that will retain repeat customers and wow new customers into becoming regulars. Several organizations will employ seasonal employees to work in stores and man the contact center during those busy weeks, but having the required number of staff members isn’t enough. Businesses need to provide the necessary training that allows seasonal workers to deliver the same customer experience as permanent employees by having access to the right information to answer customer questions, and being able to ask for help when they get stuck. These systems need to be put into place early on to avoid an agent trying to find someone more senior to help when the contact center is inundated with calls. Members-only online retailer Beyond the Rack equips its seasonal workers with in-depth knowledge to allow them to answer the questions that are most prevalent during the holiday season, explains Kevin Murphy, the company’s senior director of business intelligence. This gives permanent staff members the time to answer more complicated questions that customers might have rather than get bogged down with straightforward holiday-related queries.
If last year’s trends are anything to go by, online retail is expected to be a major player. Research by comScore found that Americans spent a staggering $42.3 billion in online transactions last year, a 14 percent increase over 2011. Asda, the British supermarket chain, has already predicted that 75 percent of its customers will be shopping both online and in stores this holiday season. Therefore, apart from preparing their stores for the holidays, businesses also need to invest heavily in their online capabilities. The last thing retailers want is their websites to crash on Cyber Monday and it’s, therefore, imperative to make sure that servers are able to deal with the expected spike in Web traffic. “Just as people don’t want to stand in line at their local store, they leave a website when pages are loading slowly,” stresses Alexander van Slooten, marketing director of Dutch online retailer Wehkamp.nl. After all, other online retailers are only a quick click away. The retailer is exploring the possibility of putting its application in the Cloud to deal with the growing number of visits and make its website more scalable.
Mobile shopping is also expected to be an important contributor to retailers’ coffers. According to an IBM report, 24 percent of consumers used a mobile device to visit a retail site, a big jump from 14.3 percent in 2011. As Rick Chavie, vice president of omnichannel at Hybris, notes, unless retailers can deliver a reliable mobile experience, they will lose part of their sales to their competition.
While eggnog and brightly wrapped gifts are a distant memory for most consumers, Best Buy Canada, The Jones Group, Limoges Jewelry, and Philz Coffee are already in holiday mode, making sure that everything works smoothly during the most important days of the year. The retailers share how they’re preparing for the holiday rush, explain how they’re integrating learnings from previous holiday seasons in their current plans, and share some tips for a successful shopping season.
Last Christmas imparts important lessons
In order to be successful, organizations need to acknowledge their mistakes, understand what went wrong, and then make the necessary changes. Rather than being a sign of weakness, learning from failure is an essential part of any planning strategy, especially when it relates to one of the busiest and lucrative shopping seasons of the year.
Best Buy Canada is one organization that recognizes the necessity of looking back and analyzing what worked and what didn’t. In fact, according to Robert Pearson, vice president of ecommerce at Best Buy Canada, holiday planning starts with a thorough review of the previous season, outlining successes and pinpointing areas of improvement. “In retail you always need to be evolving,” he notes. “We learn something every year.”
One area that Best Buy Canada is focusing heavily on is multichannel retail. Customers are interacting with their favorite brands, and doing business with them, over multiple channels, and adapting to this multichannel reality is a do or die for organizations. For example, Best Buy Canada customers have the option to reserve an item online for in-store pickup within 48 hours. This is a highly popular feature with customers who don’t want to fork out money for an item they might not want to purchase, but it also poses a challenge for already bustling stores during the busiest time of the year. “The demand is enormous with tens of thousands of customers coming into the stores,” Pearson explains. The company needs to have trained associates who can cater to customers’ needs and ensure a great experience.
Despite the logistical challenges that this function poses during a busy time, the company wants to keep offering this popular feature. Different locations also need to make sure that their stock isn’t completely reserved, leaving no availability for customers who didn’t reserve an item before visiting a store. “We are constantly reviewing this function,” Pearson explains. The ecommerce team is working closely with the products team to find the best balance that provides the best experience to all customers in time for the holidays.
Being totally ready for the spike in traffic is paramount to success, and holiday planning starts immediately after the previous holiday season wraps up. While Black Friday and Cyber Monday see an increase in sales, Best Buy Canada experiences the real spike in holiday shopping just after Christmas, while online sales start gearing up on December 24th. “The shift is dramatic—you go from 30 miles an hour to 300 miles an hour overnight.”
Apart from making sure that the online capabilities are sturdy and able to offer a great experience despite the influx of customers, Best Buy Canada also needs to accurately forecast what customers will want to purchase very early on in order to have those items in stock. Consumer trends factor in when determining the offers that will entice shoppers to make a purchase amongst increased competition. Further, customer expectations are also shifting, keeping companies on their toes and requiring constant adaptation. “You can never stand still because you’ll slip back,” Pearson says.
Mobile commerce is coming to town
Delivering a memorable customer experience is essential, especially during the busy holiday season and a lot of preparation goes into achieving this, notes Michael Hines, vice president of e-commerce technology at The Jones Group. With online sales becoming even more popular, The Jones Group is making sure that all its brands have sturdy websites. “Try not to think about performance as a once-a-year event,” Hines stresses. Instead, the organization works year-round to make sure it can deliver the blazing fast web experience that customers expect, even during the highest traffic. “We have to test capacity to make sure our servers don’t fail in the middle of Black Friday but continue delivering a great experience,” Hines says. He explains that small changes throughout the year can lead to degradation in site performance, making regular testing and tweaking of the site essential. “Make time for testing, have a responsible person in charge, and have the tools to measure,” he recommends. Further, organizations need to look at potential Domain Name System (DNS) vulnerabilities that could bring their online properties down over the holiday period. Hines recommends checking which other companies share the same DNS server, determine the risk of any of them falling victim to a denial of service attack which would also impact the retailer, and have a backup system just in case.
The best organizations keep up with their customers’ expectations and customers have been clearly showing a move to mobile shopping. This trend hasn’t been lost on The Jones Group. “In the past 18 months this has become less conjecture but a day-to-day [reality,]” Hines says. Customers are not only using their mobile devices to browse, but are also doing business straight from their phones or tablets.
Hines notes that one challenge that customers face relates to difficulty inputting payment information on mobile sites, especially when they’re on the go. Recognizing this issue, The Jones Group wanted to find a way to simplify the transaction, speeding the process, and improving the experience. The solution was to integrate PayPal on its brands’ mobile sites, allowing for a quick payment system. The system was introduced for Easy Spirit and Anne Klein, two of The Jones Group’s smaller brands, before the 2012 holiday season to test their efficacy and Hines notes that the system worked very well. Plans are currently in place to integrate the PayPal payment system on all brands’ mobile sites by the coming holiday season.
Driving home [the right message] for Christmas
With up to 45 percent of sales taking place during the last months of the year, the holiday season holds the secret for a successful year for Limoges Jewelry, the maker of custom-crafted, personalized jewelry. As Jon Ozaksut, the company’s ecommerce marketing manager, explains, even Valentine’s Day and Mother’s Day don’t come close to the sales made during the end-of-year holidays.
But, a high sale volume doesn’t necessarily mean profitability, as Limoges learned in 2011. The company’s offer that included free shipping and guaranteed delivery by December 24 came close to falling victim of its own success. “We had some logistical issues in terms of getting orders out,” Ozaksut explains. Limoges’ leaders had to make the decision to splurge on expensive expedited shipping to ensure their customers received their orders on time. This was an expensive lesson for Limoges, and last year the firm paid greater attention to detail with its free shipping offers, making the cutoff date earlier. Ozaksut notes that the company is working on an even better solution for this coming season. The company wants to make sure it delivers a great experience. Social media is allowing Limoges to get a real-time indication of customer sentiment, allowing the company to interact directly with customers and identify any trends. “We want to take a proactive approach when something goes wrong,” he notes.
As the saying goes, “out of sight, out of mind.” This is a risk that retailers cannot take when jostling for market share among an increasing number of competitors. They are therefore under a lot of pressure to not only deliver the right message over the right channel, but also get the timing right. “You need to buy ad space as soon as it’s on the table,” Ozaksut says.
Nowadays, companies are leveraging email to interact with their customers. But again, having the perfect message with the right offer is only part of the puzzle. Ozaksut says Limoges works hard throughout the year to achieve high levels of email deliverability so that the email gets into the customer’s inbox. Of similar importance is creating an engaged audience which looks forward to receiving messages, which would otherwise risk getting lost in an overcrowded inbox as different retailers jostle for customers’ attention.
All I want for Christmas is... a positive experience
It might be an everyday purchase, but sales of coffee go up during the holiday season. Not only are more people in celebratory moods meeting their friends for a warm pick-me-up, but a pound of coffee makes for a great stocking stuffer. For Philz Coffee, a San Francisco-based chain, November and December bring a good spike in sales. As Jacob Jaber, the company’s CEO, explains, even though the coffee industry is by no means seasonal, the holiday spirit does have an impact. “A lot of people buy pounds of coffee, mugs, and gift cards,” he notes.
In order to be well prepared, the company, which has 13 retail stores apart from its e-commerce platform, needs to be able to accurately forecast its sales by looking at previous years’ traffic and take into consideration any new trends; for example, what type of coffee customers are buying. “The goal is to make sure we don’t run out of coffee,” Jaber explains.
Based on learnings from last year, Philz will be making a change to its holiday preparedness. Jaber notes that the company was offering discounts on its house blend, which amounts to more than one-third of the coffee sold by Philz. The increase in sales meant that associates were taking a long time packaging the coffee, impacting the customer experience. This year the company decided to pre-package its house blend at the warehouse allowing associates to be more agile and have more time to serve customers.
While the company is open to hiring seasonal employees, Jaber says this is something that needs to be done very carefully and it’s imperative to train even short-term workers to represent the brand in the same way as permanent employees. “Coffee is very habitual,” he stresses. It is therefore important to deliver a consistent experience every time they walk into the store.