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GUEST COMMENT Why retailers must build customer relationships that last beyond Christmas

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Not everything about this festive period will be different. Despite the pandemic disruption, consumers are determined to embrace seasonal cheer and all that comes with it, including shopping; with 67% planning to spend the same or more than normal. The now traditional John Lewis ad has also arrived on schedule, driving the usual buzz. 

But retailers are facing the challenge of adapting to many significant changes. 

With shopping habits evolving years ahead of expectations and online sales surging by 129%, optimising digital operations is more crucial than ever. In fact, some estimates predict 2020 will see two years’ worth of ecommerce growth compressed into one holiday season. As well as moving where they shop, consumers are adjusting when they buy; purchasing in advance to avoid delivery delays and causing a ripple effect across stocks, promotions, and sales. 

While there is still plenty of potential for retailers to achieve huge success, seizing it will mean both moving with the omni-channel shift and adjusting to the new shape of consumer trends. Retailers must provide engaging digital experiences that will not only enhance their festive gains, but also help build enduring consumer relationships. 

Headline events lose their sheen 

Flagship shopping events have become an integral element of the festive season, especially transatlantic imports such as Black Friday. But there are signs these sales frenzies may be losing their status as primary drivers of festive revenue. This year, the increase in early seasonal buying — with nearly 30% of consumers having started their purchasing by mid-October — has led many retailers to bring forward offers, sparking suggestions that spending during staple promotional events may be sizeably reduced. 

Analysis of our own client database, however, also indicates this trend has been growing for some time. Between 2017 and 2019, reliance on Black Friday and Cyber Monday dropped by 25%; with the most recent contributions to annual online sales reaching an average of 6.7%. As more retailers strive to outpace competitors by launching their offers first, it seems the impact of one-off events is declining, as is their allure for consumers. 

When combined with the continual acceleration of online shopping, this means there is a need for retailers to move beyond fixating on driving maximum sales via singular events. Consumers are used to receiving countless online discounts during the holiday period and are getting savvier about comparing deals and brands. Capturing their attention is therefore going to mean taking a different tack by delivering greater value and developing close personal bonds that keep consumers coming back, regardless of the season. 

Playing the long game to fuel sales 

Retailers need to switch their focus from pushing simply for fast purchases to producing captivating digital experiences. On an immediate basis, interactions should aim to re-create the magic of festive stores by delivering moments of meaningful connection. But it’s also crucial not to let momentum drop once seasonal sparkle fades. To safeguard their bottom line and earn lasting loyalty, retailers must set their sights on engaging consumers throughout their lifecycle and across every online touchpoint. 

Crucial to this will be ensuring each interaction lives up to modern consumer expectations of tailored, speedy, and — above all — convenient online shopping journeys. That, in turn, will mean bolstering the ability to consistently pinpoint and deliver what individuals want by gaining an instant picture of their unique behaviours, interests, and preferences. 

Doing so isn’t as complicated as it sounds. Most retailers already collate vast quantities of cross-channel data that forms the ideal base for enhancing consumer understanding, but the tendency to store information across isolated systems makes it hard to activate. These issues can be effectively overcome using tools with smart orchestration capabilities such as customer data platforms (CDPs). By joining up information from various sources — including websites, mobile apps, emails, and real-world purchases — CDPs can turn disordered data into a complete, unified view of consumer activity; giving retailers the insight needed to achieve consistently personalised experiences, wherever shoppers choose to interact.

The future of retail is data-driven 

As retailers face an uncertain future, leveraging CDPs to continuously align with changing consumer habits is set to remain essential. This will be especially true when used in tandem with advanced analytics platforms that allow retailers to dig deeper into the connected overview they generate and unlock more granular insights. 

Blending CDPs and intelligent analytics suites will better equip retailers to quickly uncover emerging patterns and spot opportunities to strengthen relationships. For instance, that might involve identifying high value customers such as those who have made frequent purchases over the festive season and making sure they are greeted with personalised recommendations for related items or exclusive rewards on their next site visit. The added advantage being that as well as increasing the chances of loyalty, this approach can also reduce the confusion fuelled by overwhelming product choice. 

In the longer term, assessing a mix of historic buys and recently viewed items can identify which products shoppers are likely to be interested in next and guide strategically targeted offers across the year. With refined segmentation of consumers who show similar tastes and habits also enabling retailers to scale up communications into larger campaigns. 

Among all the unknowns of 2020, consumer appetite for festive shopping is one fundamental certainty. But retailers hoping to effectively harness the season of giving must be careful to avoid centring their sole attention on fast gains and big-hit sales events. While shoppers may be keen to spend, they will reserve their purchases for those who take the time to understand their changing needs and consistently fulfil them. Personalised, insight-driven, and dependable digital experiences are due to be the vital ingredients for building revenues and relationships that last, during Christmas and beyond.


Steve Carrod, co-founder and managing director, DMPG

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