The Retail Trends That Will Make or Break the Holidays… and How to Prepare for Them

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It’s the height of summer, but some retailers are already preparing for this year’s holiday season. And, like the last decade, there promises to be continued shifts in consumer spending, habits, and expectations. The holiday season is the most important time of year for most B2C retailers, and yet so many are still flying blind. What are the shifts taking place and how can your company take advantage of them? Let’s have a closer look.
 
To begin with, most people appreciate that retail markets are increasingly chaotic, competitive and difficult to forecast. For instance, more than 9,000 brick and mortar stores in the U.S. have closed in the first half of 2017. Major brands--including household names like Macy’s, Sears, and J.C. Penney--are on the ropes and have already announced store closures as well.

 

5 Major Trends Impacting Retail This Holiday Season

There are 5 major trends impacting retail these days and they are all magnified during the holiday seasons:
 
  1. A dramatic shift to e-commerce.
    A quick look at how digital has upended the post office, the music industry, and publishing tells you all you need to know about the risks of not adapting to the new landscape.
     
    In the past, Christmas cards, CDs, and magazine subscriptions figured prominently when it came to holiday giving. But the advent of social media, music subscription services, and digital magazine sites like Zinio has changed all that. Today, any company without an e-commerce strategy risks irrelevancy.
     
  2. Retail is extremely saturated in the U.S.
    Credit Suisse recently  downgraded the U.S. retail sector because, as one store owner lamented, “people are not spending.” 
     
    Indeed, many consumers view brick and mortar stores as little more than showrooms where they view and try on products before purchasing them online for less. This problem is compounded by the fact that the U.S. has  6 to 8 times the amount of space devoted to retail than most other countries. 
     
    As a  report on the future of retail by Synchrony noted, “retail must streamline and consolidate in the future,” which entails a comprehensive e-commerce strategy.
     
  3. Amazon continues to be the force in retail.
    The online giant is a cyclone that’s disrupting every industry it comes in contact with as well as the entire market landscape as we know it. Their recent purchase of Whole Foods promises to reshape the grocery industry, supermarket chains, and the neighborhood shopping experience. 
     
    That’s because the world’s most efficient order fulfillment service has mastered the art of pleasing the customer by offering unrivaled service and an utter devotion to data and analytics. Not surprisingly, most analysts expect the move will with further  diminish the importance of retail in American life. Just in case you are not convinced, here are a few relevant stats to consider:
     
    • Four out of every ten dollars spent on the Internet goes to Amazon
    • In 2016, Amazon was the second leading apparel retailer in the U.S., but by 2017 it is expected to reach #1.
    • 60% of all product searches begin on Amazon.
       
  4. The user experience matters.
    Consumers have more choices than ever, and, as a result, they expect more than just a transaction. Every good or service has a story, and brands are now finding ways to compete by delivering an experience behind each item as a part of a greater brand journey.
     
  5. Mobile tipping point.
    Mobile is the new center of gravity when it comes to the online experience. Retailers should consider launching a mobile strike team dedicated to exploring and implementing new merchandising opportunities with advanced digital commerce technologies. 
     
    You may not have the time to do a ground-up site build, but there’s still plenty to improve. This could include  push notifications near point-of-purchase locations, event reminders, and messaging that encourages social sharing of brand experiences. You need to empower people who can harness the new possibilities created by mobile.
 
 

What can retailers do about this before the holidays?
 

  1. E-commerce
    Customers are migrating to e-commerce so you have to make the move as well. In particular, the new landscape is especially customer-centric. As a result, it’s tremendously important for you to anticipate customer needs and engage them.  
     
    What items are they looking for over the holidays, which promotions will capture their interest, and how do seasonal factors affect their buying habits? Be prepared to survey customers directly and use analytics to respond more adroitly to their expectations.
     
  2. Retail saturation is not a problem that is easily solved
    However, aligning e-commerce and retail to capture volume is the first step. In particular, you should make sure that your promotions are valid across all channels and that your inventory is accurate and up-to-date. For example, make sure consumers can find what they want online, but be able to pick it up in-store the same day if that is their preference.
     
  3. Are you capitalizing on Amazon’s popularity?
    It’s not too late to partner with the online retailer and capitalize on their phenomenal reach. Today’s customers expect to find businesses like yours on the Amazon site. 
     
    In all probability, Amazon will continue to be the destination for retail searches. You need to take advantage of that, particularly during the holidays when sales volumes typically jump 50 percent.
     
  4. Recognize the value of a User Experience (UX)
    UX is a critical consideration into the customer's journey with your brand. Today, it’s not enough to have a great product or service. Shopping is about identity, a lifestyle statement, and creating a great experience with your brand. 
     
    When it comes to the holidays, think beyond the transaction and try to imagine what the process of gift-giving is like for your customers. REI, for example, is one company that is doing a great job of tying together both their brand and the customer’s experience.
     
  5. Are you optimizing for mobile-first?
    Mobile is the new center of gravity when it comes to the online experience. Retailers should consider launching a mobile strike team dedicated to exploring and implementing new merchandising opportunities with advanced digital commerce technologies. 
     
    You may not have the time to do a ground-up site build, but there’s still plenty to improve. This could include push notifications near point-of-purchase locations, event reminders, and messaging that encourages social sharing of brand experiences. You need to empower people who can harness the new possibilities created by mobile. 
     

Takeaway

Changes in retail are occurring at breakneck speed and you must keep up. The transformations taking place are especially amplified during the holiday season. Many traditional retailers are on the verge of fizzling because they are not adapting fast enough to emerging e-commerce trends. This upcoming holiday season is the time to seize the trends instead of being their victim. Make this holiday season your best retail season ever!
 
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