Alonso Vargas, SVP of Product at Flybuy.
As the holiday season approaches, retailers are gearing up for one of the busiest and most profitable times of the year. However, in a landscape affected by inflation and evolving consumer preferences, the competitive battleground has changed.
Today’s retail success is increasingly defined by the ability to deliver exceptional guest experiences across both digital and physical channels. This paradigm shift highlights the critical need for retailers to optimize their technology stacks, combining digital solutions with a seamless on-ramp to physical stores to meet the demands of today’s consumers.
In 2022, total holiday retail sales rose 7.6% to $1.49 trillion, with e-commerce sales up 7.9% to $252 billion. Retailers such as Target have thrived by leveraging omnichannel strategies such as same-day delivery and curbside pickup that have contributed to 18% increase. in same-day services, with 95% of orders fulfilled by stores. This demonstrates the power of omnichannel integration to capture both in-store and online shoppers.
For 2023, holiday retail sales are up a lot 3.8%, reaching about $964.4 billionwith e-commerce sales continuing to serve at 10.3% to 12.8% (according to Deloitte), further reflecting consumers’ growing preference for convenience and online shopping. Nevertheless, 85% of consumers expect to make at least one purchase in storeemphasizing the enduring importance of brick-and-mortar experiences.
Click and Collect services, bridging the gap between digital and physical shopping, represented 17% of holiday purchases. Best Buy also demonstrated the power of omnichannel strategies by effectively managing holiday demand buy-online-pickup-in-shop (BOPIS). Retailers that adopt these approaches are positioning themselves for continued success in an increasingly competitive holiday landscape.
Adjust for inflation
The current economic environment, characterized by rising inflation, has presented significant challenges for businesses in all industries. Many retailers are struggling with increased costs, which has forced many to do so revise their pricing strategies. However, simply competing on price is no longer enough to attract and retain customers.
The focus has shifted to delivering value beyond mere cost savings. Retailers must focus on improving the overall customer experience by ensuring that digital storefronts are as personalized and seamless as their stores. This requires the integration of online and offline channels to provide convenience and choice throughout the shopping journey.
The importance of guest experience
In the age of heightened consumer expectations, providing a positive and memorable guest experience has become a key differentiator for retailers. This extends beyond the products themselves, covering every touchpoint of the customer journey. In a market dominated by digital giants like Amazon, retailers must prioritize the customer experience both online and in-store to stay competitive.
Convenience and personalization are now critical drivers of consumer loyalty. By offering seamless omnichannel experiences, personalized recommendations, efficient checkout processes, and exceptional customer service, retailers can cultivate deeper connections with their customers.
Investing in improving the guest experience not only leads to customer satisfaction and retention, but also strengthens the retailer’s position in a crowded market where the value proposition extends beyond products and prices.
Optimizing your tech stack for the holidays
As retailers prepare for the holiday rush, optimizing your technology stack is essential to meet the demands of a digitally-driven marketplace. Taking a holistic approach that integrates digital solutions with physical store experiences can help retailers create a seamless and engaging shopping environment that resonates with today’s consumers. Here are key strategies to consider:
1. Uploading your eCommerce platform
Improve your online presence to meet the growing number of consumers who prefer to shop online. Make sure your e-commerce platform is user-friendly, mobile-responsive, and equipped with features like personalized recommendations and easy checkout processes.
Platforms like Shopify, BigCommerce, and Adobe Commerce offer powerful, user-friendly eCommerce solutions. These platforms are mobile responsive and have built-in tools for personalized product recommendations and streamlined checkout processes. For example, Shopify’s AI-powered tool, Shopify Magic, helps retailers deliver personalized experiences at scale.
2. Implementation of Omnichannel Capabilities
Bridge the gap between online and offline channels by offering a unified shopping experience across all touchpoints. Enable options like buy online, pick up in store and reserve online, buy in store to cater to different customer preferences.
Retailers can use Salesforce Commerce Cloud or Kibo for unified commerce platforms that enable a seamless transition between online and offline channels. Functions like BOPIS are supported by solutions like Oracle Retail and Shopify POS.
3. Enhance customer engagement
Leverage data and analytics tools to gain insights into customer behavior and preferences. Use this information to tailor marketing campaigns, promotions and product offers that resonate with your target audience.
Analytics platforms like Google Analytics 360 and Adobe Analytics help retailers gain deep insights into customer behavior. For more targeted marketing and personalization, companies like Dynamic Yield and Emarsys offer solutions that customize customer experiences through real-time data.
4. Streamline operations with automation
Implement automation solutions to optimize inventory management and ensure timely order fulfillment. By reducing manual tasks and increasing operational efficiency, retailers can provide a smoother and more efficient shopping experience for customers. For example, Manhattan Associates offers advanced warehouse management systems that automate inventory tracking and fulfillment processes. Brightpearl provides retail management software that integrates with e-commerce platforms to automate order management and inventory control.
In a retail landscape shaped by inflation and evolving consumer expectations, the holiday season is a critical opportunity for retailers to demonstrate their ability to adapt and thrive. By investing in a robust and comprehensive technology stack that combines digital innovation with physical store experiences, retailers can position themselves for success.
Delivering a superior guest experience that resonates with customers will be key to driving growth and building lasting relationships during this pivotal time. As we navigate the challenges and opportunities of the holiday season, remaining agile, responsive and focused on improving the overall customer journey will be essential to success.
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