OPINION: The Holiday Season in Review: What Smart Retailers Know

The Holiday Season in Review What Smart Retailers KnowThe following is a guest contributed post from Beth Kindig of Personagraph.

Although nothing quite beats the in-store experience during the holiday season with the long lines and crammed parking lots, it’s not hard to understand why consumers are starting to prefer desktop and mobile – rather than brick-and-mortar – for their gift lists. This year’s decline for in-store retail on Black Friday was in excess of $1 billion. Meanwhile, both traffic and sales on desktop and mobile saw conversions up 4x compared to the October daily average, and there was a 25% YoY increase in online sales, resulting in $4.45 billion in purchases.

And, mobile is stealing the spotlight. On Thanksgiving and Black Friday, mobile exceeded desktop traffic, averaging more than 60% of retail site traffic. Likewise, on Christmas Day, mobile accounted for 42% of ecommerce transactions.

Nothing too shocking here, except to support what we already knew… brick and mortar retailers must embrace digital. Omni-channel is the word for it, and we’re seeing retailers such as Sears and Best Buy reap the rewards. With the 2015 season reporting a 7.9% increase in retail sales, the market is healthy but the competition is fierce. Amazon alone claimed 36% of sales on Cyber Monday and added an additional 3 million Amazon Prime accounts the week before Christmas. So, what do these smart retailers know – and what can all of us learn from the year’s maddest rush towards cash purchases?

  1. Physical visitors are worth more

Research shows that 86 percent of consumers say they are likely to discover new brands or products using their mobile device. This provides an enormous opportunity for mobile advertising as a targeted message can give the information a consumer was just looking for. Moreover, a retailer’s location is an intrinsic part of how attractive its offer is perceived and targeting people that are nearby has a great effect on conversion rates.

The possibility to see and touch products in real life is an enormous advantage that physical retailers have over their digital counterparts and should therefore be leveraged. In other research, when following 1,500 shoppers over the course of three quarters, it was found that store visits shot up 80% the first day a mobile ad was run by a retailer.

Obviously, these are great results but there is much more to it. Smart retailers have invested in the in-store experience, and therefore the customers receive guidance from professional sales associates that can up-sell and cross-sell much better than any website can. In other words, a physical visitor is statistically worth more than a digital one, and your sales force should be equipped to maximize their experience.

  1. How to go from Point A to Point B: Start with Mobile

Smart retailers begin with mobile rather than making it an after-thought, thereby optimizing every touch point for the mobile experience. The main touch point where retailers fail? Simple login processes and cart checkout. The old adage is to not make a paying customer wait. In the mobile world, do not make a paying customer login more than once. Developing your own mobile app can greatly increase ease of checkout and has many other benefits but this is not without its risks as development and marketing apps has become very expensive.

  1. Microsites for the Win

A microsite is a standalone website that is built specifically to focus on one message and leave out all the clutter that a company’s regular website has. For example, if a particular product has a high margin or when a retailer simply needs to get rid of over-stock they can choose to highlight this product with its own microsite.

The benefit of a microsite is that one can be extremely specific. There’s only one product, which usually means that there’s a specific target audience to be defined. The website design, messaging, and marketing can therefore be tailored to fit this specific audience. An aggressive marketing campaign created around the microsite is what’s needed to attract the right audience with high conversion rates.

  1. Not Showrooming; Webrooming

In recent years we saw how showrooming has become (a rather irritating) trend: finding a product in-store but instead buying the product online at a lower price. However, at a closer look, what we have found is that e-commerce does not always compete with brick-and-mortar, sometimes it complements it. An emerging trend is the practice of webrooming: researching a product online before buying it in a brick-and-mortar store. In other words, the upside to showrooming, is the reverse action. Deloitte calculated the effects webrooming and found that mobile influences over 1 trillion dollars worth of sales in physical retail.

  1. A Prime Example

Amazon Prime is crushing it and bears an honorable mention of keeping shipping and returns seamless for the customer. Many online retailers offer free shipping and free returns, but a step up would be instant access to all of the above.

  1. Errr, Beacons

Although beacon technology has been hyped and later ignored en masse, we now see some signs that the technology is finding early adoption. Business Insider found that beacons influenced $4 billion of retail sales in 2015 and that this number will tenfold (!) next year to nearly $40 billion in sales.

The most obvious use case is to send customers location triggered push notifications, popularized by the Apple Store. For example, a welcome message when entering a store, a general coupon when walking by the store, or even a specific coupon for a product a customer is looking at at that very moment.

Another benefit to beacons is they provide data on how people move inside stores. This can provide valuable insights in how a store needs to be designed to provide maximum results.

1Beacons also play well with mobile ads. There’s nothing more important in advertising than measuring the results of an ad. With beacons, advertisers can finally “close the loop” and link online and mobile ads to physical store visits.

A theoretical use of beacons can also be to use digital information about a customer when they are shopping in a store. For example, if a customer has the retailer’s app that shows purchase history and general preferences, this information can be requested (opt-in would naturally be required) by the sales associate that uses this to personalize their service accordingly.

The combination of digital data, professional sales associates and being able to experience products in real life is extremely effective to cater to each customer personally and with maximum effect.