It’s the most wonderful time of the year and certainly one of the most competitive in retail. But as we enter the last period of a tumultuous year steeped in uncertainty from one day to the next, retailers are about to hit a ‘peak’ period in the shopping calendar, which in normal circumstances would deliver an avalanche of sales and lots of new customers.
But how will a Covid-19 Christmas look? We all know that 2020 to date has been a bit different than usual and there’s no doubt that as the festive season approaches, retailers may have to change tact in their strategies to reflect changing consumer behaviour.
During lockdown, UK marketing budgets declined at their fastest rate since the 2008/9 global financial crisis and reports suggest that ad budgets will remain tightened at least until the end of 2020. Does this mean the UK’s biggest retailers, who traditionally start planning for this period at the peak of summer, will hold back on their blockbuster Christmas TV ad and plough their advertising dollars into digital channels?
Well, contrary to how things were tracking pre-Covid, consumption of both linear and on-demand TV actually shot up as consumers were confined to their homes.
As Boots’ CMO, Helen Normoyle, noted back in July: “We’re dealing with a set of questions and circumstances that we’ve never had to deal with going into Christmas… this will be a Christmas like no other”.
Too right it will. In fact, you could say it will be a “Clickmas” like no other. According to research from Rakuten Advertising, over 70% of holiday shoppers do not plan to decrease spend on Christmas purchases. Good news for retail. But perhaps more interesting are the next stats: 73% of holiday shoppers will primarily purchase online this Christmas, regardless of a potential return to lockdown, with over half of that (54%) expected to be on mobile.
There’s no doubt that Christmas 2020 is going to be a little bit different. Still wonderful, of course, as research suggests that families are expected to focus on more ‘thoughtful’ and ‘meaningful’ celebrations and gifts, and the recent sense of community spirit has never been more powerful. But the usual festive cheer, hustle and bustle felt through department stores up and down the country in those weeks leading up to it might be a little different.
If this peak season follows a similar pattern to what we’ve seen with the e-commerce boom over the last few months, it’s that shoppers are going to turn to their screens to shop for the latest deals this year. The Black Friday in-store shopping frenzy, which traditionally marks the beginning of this peak season, likely won’t bring the usual flurry of viral videos across social media as we watch bargain-hungry shoppers battling over the last marked down flat screen TV ‑ especially if face masks and social distancing rules have anything to do with it. The key will be to capture these shoppers online but, more importantly in the current economic climate, retaining them long after the sales signs disappear.
Online retail is set to be the real Christmas cracker this year. But it can’t be simply a quest for big sales. It has to go further than that. Brands and retailers, whether selling direct or via an ecommerce marketplace, need to give each and every individual shopper the best possible customer experience. And the best part is: it’s not rocket science.
If managed correctly, these spikes in business can help to sustain sales all year round and the key is to do all you can to ensure that you retain, re-convert and upsell as many of the new customers you will attract, which can easily be five times more than you service outside the peaks. Too often retailers are so focused on maximising sales and fire-fighting the delivery nightmare that ensues that anything else understandably gets pushed aside.
Covid-19 has ushered in a new world order; one where consumers are craving personal relationships with their favourite brands and the retailers they choose to spend their well-earned cash with. The moment they click ‘buy’ is a prime opportunity to engage with them during this most emotional phase of their online shopping experience and create a relationship that stands the test of time. If you can retain them beyond the buy button, then you are well on the way to driving repeat purchases and creating long-term brand loyalty.
Once shoppers have made their purchase, they are already focused on tracking down the next bargain. Translate this into the online world and you’ve got to ask: why would they want to engage with a retailer they have already bought from?
Well, how about because you’re giving them something of value? By this I mean vital information about the progress of their recently acquired bargain which is coming from the warehouse until it reaches their front door. From discounts to upselling opportunities and complementary purchases and a range of engaging content about the item they’ve just bought, the opportunities within the post-purchase communications channel would give Santa’s gift list a run for its money.
Please, for Santa’s sake, don’t forget your customers as soon as they hit ‘buy’. Don’t hand them over to your logistics company and hope for the best. It’s not only a successful strategy for ecommerce retailers to follow in general but during peak season it can be the catalyst that turns all the hard work you put in from being just a big sales push into a major customer relationship management drive that continually builds your customer base, along with repurchasing, retention and loyalty.
By taking control of the entire customer journey, brands have an opportunity to create loyal customers for life and not just for Christmas.
Conor McGrath is Managing Director, Head of UK & Nordic Clients at parcelLab