What Retailers can Expect This Holiday Season

5 areas the industry is prioritizing in the new Amazon Age

By Lynn Hughes, Managing Partner, Columbus Consulting

What’s different this year? AI. Artificial Intelligence is playing a key role in personalizing product selections and pricing opportunities. Smart personalization is driving many campaigns with dynamic emails, real-time recommendations and offers to boost in-basket conversions. In turn, as value continues to motivate shoppers, sales and discounts are being used not just for acquisition, but for reinforcing customer experience and competitiveness to gain a larger share of wallets. With 84% of shoppers expected to cut back purchases over the next six months (PWC), retailers are looking to get their sales in early to avoid late in-season over-inventory levels and heavily discounted margin dilution.

Equally critical to product and price, this year retailers are looking to make purchases easier with fast and flexible payment options. Pay-over-time, buy-now and pay-later, third-party payment apps and even the return of layaway programs are being utilized to motivate consumers to spend beyond their budgets now with the promise of catching-up over time. This “bird in the hand” philosophy speaks to the need to capture early sales and avoid pricing wars.

Similarly, retailers are more prepared to maximize the post-purchase experience. Becoming more efficient and consumer-centric during the returns process can actually drive more sales and solidify brand affinity. Leveraging multi-channel locations, ease of online returns, streamlined reverse logistics and “save-the-sale” messaging will all come into play as a sale made should be a net gain and not have a negative or neutral impact to the business.

The season has technically started with Amazon kicking-off the holiday calendar with their October Prime Days (10/7-8). This trend of “earlier shopping” has been shifting for years as Black Friday continues to become diluted with pre-Thanksgiving and Cyber Week sales. Retailers have been building new promotional calendars to spread out deals and minimize overload on former “peak” periods. The implications of this shift require retailers to plan further in advance, manage inventory flow differently and ensure a unified commerce approach to consistent and seamless pricing and selection.

Not to be out-done by the overall selling experience, last mile delivery is top of mind for retailers. The new baseline of home delivery, next-day or same-day service established by Amazon has challenged retailers to fulfill orders with urgency and immediacy. Shoppers are not only looking for ease, selection and value, they are looking for services that include: package/order tracking, flexible ship/pick-up options, and minimal/free delivery offers.

So, what does all of this new technology and operational efficiencies mean to traditional retailers? Well, for one, brands should not just look to the shiny new things in the industry to be relevant. Rather, they need to incrementally build upon what has made them successful in the past. Constant reinvention is not true transformation. Retailers need to be focused and clear on what THEIR customers are looking for and improve upon that while maintaining their own sensibility. The more technology plays a role in the customer journey, the more important human connection will become. Physical experiences may be able to be replicated in our new virtual reality, but personal/human engagement remains at the core of retail. Live holiday music, special events, hospitable environments, friendly/knowledgeable staff and unique, compelling merchandising are all key ingredients to the retail mix. Impulse purchase selections, surprise and delights, free gift wrapping and social shopping opportunities (think girls’ night out), do not need to compete with robots and drones. Long story short, don’t try to out Amazon, Amazon.

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