2012 Holiday Outlook Guide


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2012 Holiday Outlook Guide

  1. 1. Holiday Outlook GuideCross-Channel Consistency, Mobile Integration Are Keys To Success
  2. 2. 23 Introduction4 Mobile: RETAILERS AND CONSUMERS MOBILIZE FOR THE HOLIDAYS8 Social: Building social communities that spread holiday cheer10 Marketing: Mix it up with marketing and promotions to deliver holiday success11 The price wars: competing beyond price to win holiday sales13 Loyalty: Bringing cheer to loyal customers during the holidays14 Planning and forecasting: the foundation of holiday success16 Personalization: shining a spotlight on Shoppers17 Localization: holiday shoppers respond to localized offers18 about retail touchpoints
  3. 3. 3 IntroductionThe buzzwords for the holidays are similar to what retailers are hearing year-round in today’smarketplace: customer service, cloud, cross-channel, social and mobile. But how these tacticsare implemented as part of holiday strategies can make or break the season for many merchants. In a presidential election year, holiday revenue is affected by the campaigns and the outcome. “I expect holiday“The big realization that many brick-and-mortar retailers have come to (many belatedly) is that sales to be up 3% to 4%,” noted Greg Buzek, President ofthe cloud and the store are not separate checkouts,” noted Gary Schwartz, President, ImpactMobile. “The consumer is checkout agnostic. The consumer is channel agnostic. To succeed in IHL Group. “But it will likely be the higher level if Romneythe 2012 holiday shopping season, retailers need to use mobile to engage in store and move wins the general election, the lower if Obama wins. Anthe shopper into their cloud or engage in the cloud and drive door-swing. If the retailer cannot interesting component to all of this is what happens duringeffectively clientele using mobile in the store, if the retailer cannot capture the mobile number the lame duck session of Congress. There are a lot of hugeopt-in at POS, their shopper will be poached by Amazon or, worse yet, simply abandon intent.” tax components that expire at the end of 2012 and will likelyThe fast-moving social media environment also will take retailers for a ride during the holidays. not be dealt with until the elections. The expiration of the“Given how quickly social media has been adopted, how many channels are popping up, Bush Tax cuts will have a big impact on spending; the lackseemingly daily, we believe the opportunities for retailers will increase this year, along with the of long-term AMT tax will also have an effect. This could gocompetition for consumers’ attention,” noted Michelle Crames, Founder and CEO, SkuLoop. either way based on what happens in early November.”Industry experts are predicting some of the traditionally popular retailers, such unveiling deals over time. And Best Buy and Walmart drove tremendous trafficas Nordstrom, will perform well again in the 2012 holiday season, but they also through door busters.”are watching some innovative moves from other retailers. “I’m pretty bullishon Nordstrom at the moment,” noted Paula Rosenblum, Analyst Partner, Retail Retailers committed to cross-channel consistency also are receiving high marks. “ASystems Research (RSR). “The company resisted any urges to start promoting the few retailers are doing a very good job,” Rosenblum said. “I think JCPenney washolidays before Thanksgiving, and has been very good at managing inventory, doing well even before the Johnson era (new CEO). REI is a legend in this regard.”while recording great same store sales and earnings.” Asked for one important piece of advice for retailers, Rosenblum said: “Don’t make“Sephora had a great number of unique items for the holidays last year,” noted promises you can’t keep. If your web site tells the consumer the product is in-stockCrames. “I also believe Macy’s created and sustained excitement (last year), in the store, or doesn’t explicitly say it isn’t, then the product better be there.”
  4. 4. 4Consumers have put the pressure on retailers to prepare for the mobile double from last season. However, its biggest impact will come not only fromrevolution. Some staggering statistics confirm that mobile is the place to be. its role as a revenue stream but additionally as a companion channel forOn Christmas Day 2011, for example, consumers increased mobile shopping store shoppers. Customers will be trolling the aisles of their favorite stores whileby 173% over the previous year, according to the study titled: Google Post looking at their phones; they’ll either be looking at that store’s app or mobileHoliday 2011 Takeaways. Additionally, 12% of online visits to a retailer’s web site for that retailer’s product and pricing information, or at a competitor’s.”site came from a mobile device during the 2011 holidays, a 5% year-over- But while scrambling to prepare for the holiday rush, retailers must beyear increase. careful to maintain their consistent brand message when launchingMobile has a few distinct meanings when it comes to retail: mobile mobile strategies. “Many retailers are struggling with a consistent brandcommerce and mobile payment are making the most noise, as the experience, especially in the mobile environment,” noted Lynly Schambers-increasing number of smartphone owners express their desire to shop and Lenox, Group Product Marketing Manager, Digital Publishing at Adobe.buy via their mobile devices. In-store, retailers are arming their associates “Mobile marketing professionals need to understand the emerging roll ofwith both smartphones and tablets in order to save and boost sales by a tablet application and how it can reflect and enhance a brand whileproviding a better customer experience. building a bridge across other retail channels. And, yes, this is very important for the upcoming holiday season when consumers are bombarded with“More of Christmas 2012 will be rung up on mobile devices,” noted Buzek, messages from a variety of brands.”“and retailers are scrambling to get their tablets and mobile devices ready. There is a great desire to get there Industry experts agree that mobile likely will be the differentiator between in time.  It will be interesting to see what retail winners and losers during the 2012 holiday season. “Consumers will happens with lines: Will it be mass chaos, expect a higher level of engagement via mobile this holiday season,” noted where it looks like a museum with tour Simon Salt, CEO of International IncSlingers, “so all strategies should include guides as groups of people flock and follow ways for consumers to interact with the brand via this medium — whether via particular sales personnel?” QR codes that provide additional product information, apps that allow faster checkouts, Augmented Reality to extend the environmental experience for “Mobile commerce will be showing the the consumer, or SMS campaigns to provide timely and relevant offers. Brands biggest year-over-year growth of any that execute well will find a much higher level of engagement with their channel,” added Larry Freed, President of customers and prospective customers.” ForeSee Results. “We expect it to at least
  5. 5. 5Mobile Payment:While providers are scrambling to develop and implement mobile payment solutions, the technology is only slowly making inroads in the U.S. Retailers thatoffer an easy-to-use mobile payment solution in time for the 2012 holidays will have a long leg up on the competition. “If consumers’ phones have thecapability to provide them with a seamless checkout experience, they’ll expect it to be leveraged by their favorite brands,” noted Salt. “If it is not, a newfavorite will be found.”Some recent mobile payment implementations that have seen significant success include Google Wallet, Isis, Starbucks’ internally created solution and HomeDepot’s partnership with PayPal. “Mobile is making the biggest impact on payment and the overall retail experience, is redefining in-store POS, and clearlyis the largest catalyst for change,” noted Andrew Morris, Director ofMarket Platform Dynamics, in a recent Retail TouchPoints MobilePayment report. “In fact, mobile technology is changing the entireway we think about payment. This redefinition of in-store POS ishappening quickly: already there are scores of retailers using iPads for Traditional retailers can no longer deny the impact that Amazon hasin-the-aisle purchasing capabilities and clienteling, or implementing an wrought on the retail marketplace, and they need to be armed and ready‘Apple store model’ for store associates.” to compete with this retail behemoth in order to come out on top when theIndustry experts speculate that mobile payment could be one, two or dust settles in January 2013.three years from saturation in the U.S. “Mobile payments won’t reach “During the 2011 holiday season, Amazon offered consumers $5 incritical mass in 2012, but may by holiday 2013,” noted Rosenblum, exchange for scanning in-store items and comparing the price onRetail Systems Research (RSR). “Retailers are starting to embrace, at Amazon,” said Crames. This offer took price off the table when it comesleast in some small part, the newer technologies such as Near Field to differentiating a brand. “Since retailers know that price comparisons Communication (NFC),” added Salt. “We are are happening more frequently in their stores, they must invest to make seeing NFC being adopted by vendors as varied their multi-channel experience better, and to make the experience more as the New Jersey Transit Authority and The exciting for customers.” London Underground to retail establishments such as Trader Joe’s and RadioShack. The “Retailers can not sit back and wait for competitors like Amazon to win increasing integration of mobile-based payment customers right from within the aisles of their own stores,” added Dave systems and the potential move toward virtual Bruno, Director of Commerce Studies for RedPrairie and Editor of Commerce stores we are seeing in Asia are certain to have In Motion. “Engaging, personalized content delivered to shoppers on their an impact in the U.S. in the very near future.” smartphones is a must-have capability for this holiday season.”
  6. 6. 6HauteLook has developed a loyal following of deal seekers and fashionistas due to the experiences those shoppers expect via smartphone and tablet. Forits promise of curated assortments, home goods, elite experiences, and designer example, during the 2011 holidays, HauteLook created special sales andclothing and jewelry at highly discounted prices. curated assortments consisting of the “perfect gifts” for family and friends, based on that feedback.Although HauteLook drives shopper engagement across email and socialchannels, mobile has become a vital asset to HauteLook’s success. This is “When it comes to mobile apps, one size doesn’t fit all,” Bettinelli said.especially true during the highly competitive holiday season: During Black “Smartphone and tablet apps are used in different ways and shoppingFriday 2011, the eTailer experienced a 700% boost in purchases made by contexts, so we’ve tailored each of these app experiences. However, we aresmartphone, while purchases via tablet increased 200% the same day. always looking to engage our members in new and exciting ways, so we’ll continue to explore opportunities for mobile-only promotions and events.”“Mobile quickly has become a key part of HauteLook’s business,” said GregBettinelli, CMO for HauteLook. “Our members generally are on-the-go, so Since its inception in 2007, HauteLook has developed a reputation as aour iPhone, iPad and Android apps are a crucial part of our business. We’ll primary outlet for top fashion, the most coveted lifestyle brands, and elitedefinitely see an uptick of mobile usage during the busy holiday season. We experiences, at up to a 75% savings. Sales are launched every day at 8 a.m.also are seeing that our members are shopping from their mobile apps while PT, and reminders are sent via emailat home.” and push notifications before events.As of May 2012, mobile represented up to 25% of weekday logins and 35% ofthose on weekends. Additionally, nearly 20% of weekday revenue and 30% ofweekend revenue came from mobile.Currently touting more than 700,000 smartphone and tablet appdownloads, HauteLook has streamlined the mobile browsing and buyingexperience based on its target customers’ mobile behaviors, as well as
  7. 7. 7Mobile was a key asset to HauteLook’s 2011 holiday success. However, the eTailer utilizes multiple strategies across channels to boostbasket size and optimize loyalty initiatives. Greg Bettinelli, CMO for HauteLook, shared further insight on the must-haves for this holidayseason and beyond, as well as some best practices for e-Commerce, mobile and more: 1. Keep It Simple: During the hectic holiday season, consumers want to get their shopping done as quickly and seamlessly as possible. Whether it’s via mobile, social or e-Commerce, retailers must implement a straightforward user interface that is easy to navigate. For example, HauteLook leverages a “Find It Fast” feature, which allows shoppers to sift easily through inventory based on size, price range and item. Moreover, the eTailer securely saves account holders’ credit/debit information, ensuring seamless purchasing processes via desktop, laptop, tablet and smartphone. 2. Develop Consistent Branding: As shoppers continue to consult the web and social networks to finalize buying decisions, it is becoming more imperative for retailers to keep branding consistent. Merchants must deliver streamlined messaging across all member, brand and internal touch points, including the web site, mobile apps, social media channels, emails and all other member-facing assets. 3. Mobilize, Mobilize, Mobilize: The success HauteLook experienced via mobile during the 2011 holiday season is no longer a rare occurrence. The continued adoption of smartphones and tablets has offered retailers a new opportunity to market to and build conversations with shoppers in a more direct way. As a result, it is vital that mobile apps are easy to use and navigate, and are reliable during all shopping trips. Moreover, the mobile experience must be fun as well as personalized to shoppers’ unique wants and needs, based on consumers’ past browsing and buying activity. 4. Stabilize The Site: Black Friday, Cyber Monday and other notable holiday sale days lead to daunting spikes in traffic. Retailers must ensure that e-Commerce sites and mobile apps can operate during these high-demand periods. Additionally, merchants must be wary of adding “bells and whistles” that may compromise site loads and increase likelihood of crashes, which will frustrate shoppers and veer them off course from completing purchases.
  8. 8. 8More consumers are accessing social networking sites to gather input from recommend items. However, this holiday season we’ll start to see morefamily and friends before they buy. Knowing this, retailers can use compelling retailers tapping into the other strategy, which is using social channels to touchcalls-to-action and messaging to tap these behaviors to drive click-throughs, base with their customers and garner more insight on their behaviors andcomments and shares via social media. This approach will be particularly preferences, such as providing the ability to review items or comment on avaluable during the busy and competitive holiday season. blog post or YouTube video.”A recent study from RichRelevance has revealed the profound impact social Rosenblum reaffirmed the growing importance of social media, especiallysites make on purchasing decisions. Facebook’s influence on retail shopping when used in conjunction with mobile devices. “Social/Mobile is going totraffic grew 92% from 2010 to 2011, according to the company’s “Online be even bigger this year, especially for smaller retailers,” Rosenblum said,Consumer Report.” Moreover, although shoppers who link to retail sites from “Especially for smaller retailers. They have recognized that social/mobile appsFacebook and Twitter are less likely to make a purchase, with average are one way to ‘get their names out there.’”conversion rates of 1.2% and 0.5%, respectively, the average order value is SkuLoop, a digital promotions solution provider, helps retailers develop wishfar greater on these sites than standard search via Google, according to the list applications that enable customers to register for and share their mostreport. In fact, shoppers using Twitter had the highest average order value coveted items across social channels. When linked to Facebook, these lists($121.33) of all shoppers, while Facebook browsers had an average order and their updates automatically are published to consumers’ personal pages.value of $102.59 (versus Google’s $100.16). Since Christmas 2011, approximatelySocial media has played a starring role in the new engagement paradigm, 19% of SkuLoop’s clients’ fans tappedallowing retailers to drive loyalty and one-on-one communication with into its “Wish List” tool when it wasbrand advocates and followers. However, social will become even more combined with other viral features,paramount this holiday season to driving loyalty and purchases, according to including the ability to see friends’ wishAndrea Morgan-Vandome, VP of Retail Strategy and Solution Marketing for lists, according to Crames.Oracle Retail.“Retail executives have seen two effective ways to use social media,”Morgan-Vandome said. “One is to use social as if you’re interacting at acocktail party. This strategy allows customers to talk to each other and
  9. 9. 9“Through Facebook and our Wish List app, we are able tocorrelate demographic and geographic information tospecific products,” Crames said. Since last year’s holidayseason, Facebook has rolled out Timeline and also revealed The holiday season is a prime time to generate a loyal following via social media. However,plans to implement more dynamic actions to join the “Like” many retailers are missing the mark on creating meaningful conversations with shopperstool, such as “Watch” and “Buy,” among others. “These across Facebook, Twitter and other sites. Following are tips and tricks to drive shopperstrategies will help merchants spread the word in a more engagement during the holidays:exciting way.” þþ Embrace the latest social trends: Pinterest and Instagram are among the newerBy driving dynamic and memorable interactions via social sites that allow merchants to create a face for their brands as well as offerFacebook, Twitter, Pinterest and Instagram, retailers consumers a behind-the-scenes look at company promotions. Use Pinterest tocan obtain in-depth data on customer sentiment, create holiday must-haves for customers’ friends and family, or take pictures of storeoverall brand loyalty and engagement, and other vital events and share them via Instagram.information that can contribute to future cross-channelholiday marketing initiatives. þþ Think beyond batch-and-blast specials and bland status updates: Post pictures and lists of this year’s hottest gifts, and release holiday-themed music mixes to spread the“A lot of retail leaders are looking at social information and holiday cheer and encourage re-shares.using it in their planning processes for future campaigns,such as during seasonal changes,” Morgan-Vandome þþ Start the conversation: Asking questions is an optimal way to build social dialogue.explained. “Now merchants also want to integrate social Rather than shouting marketing messages and announcements to followers,information into their CRM solutions to better shape the generate more intimate communications with consumers by asking about theircustomer experience across channels.” fondest holiday memories or favorite gifts.Morgan-Vandome added that more retailers will be þþ Get local: Best-in-class retailers are tapping intoguiding store associates on how to access and analyze social media to spread the word on local events. NICEonline ratings, reviews, blogs and other social content to Use Facebook, Twitter and Instagram, amonghelp them be more informed about target customers and other sites, as an outlet to promote location-their preferences. “This is what I call ‘lowering the barrier to specific sales, parties and other happenings,sales,’” she said. “I think we’ll be seeing a lot more of this and update consumers throughout the day tostrategy during the upcoming holiday season.” generate more conversations. This tool also is useful for advising local shoppers of their area stores’ holiday-specific shopping hours.
  10. 10. 10Marketers need to be on their toes during Holiday 2012: Doorbusters, limited- A group of industry experts offer a variety of marketing tips for retailers this year:time sales, daily deals and uncertain pricing scenarios are challenging retailers Paula Rosenblum, Retail Systems Research: “As much as I hate to see it, I ü to be ready to launch a new promotion at a moment’s notice. “Retailers should expect the doorbuster trend to continue. I think all eyes will be on JCPenney,have an arsenal of promotions in their hip pockets in case they don’t perform as to see what strategies the company puts into place.  It will be hard presseddesired,” said Lauren Freedman, President, the e-tailing group. “They also need to to resist the doorbuster crack, but I believe the company will.  If results aretest tactics prior to the holiday season and get creative with promotions to avoid positive, hopefully this will be the last year of this very ugly phenomenon…the ‘me-too’ syndrome.” otherwise it will continue to ratchet up….and we’ll be talking about ChristmasTo combat the fierce competition, some retailers are thinking outside the in July.”box. One of them is Office Depot, which will use video to support its holiday Gary Schwartz, Impact Mobile: “Be sure to combine paper and mobile ü advertising initiatives. “During the holiday season, brands are constantly releasing advertising — and pay attention to percentages.  According to variouslimited-time sales and special promotions, so it is important to ensure our ads research data from Flurry, ComScore, VSS and Alexa, retailers and brandshave up-to-date information,” said Nicole Fraley, Director, e-Commerce growth spend 29% of their budgets buying print when consumers’ time spent hereinitiatives for Office Depot. “The real-time, dynamic nature of videos, specifically has dwindled to 6% of their day. Retailers spend 1% of their budgets onSmartVideos from SundaySky, gives us the means to generate videos rapidly and mobile media although it occupies 23% of our consumers’ attention.”cost-effectively to support fluctuating price points, holiday deals and last-minute offers. These personalized videos Dave Bruno, Commerce In Motion: “Now more than ever, retailers are ü allow us to deliver a better user ready to truly embrace new devices, channels and networks for marketing, experience that increases customer promotion, and customer engagement. I expect to see a wave of new loyalty and return on investment.” additions to the marketing arsenals of retailers in almost every category — from apparel to electronics to grocery.” Andrea Morgan-Vandome, Oracle Retail: “Some retailers are working ü towards making the shopping experience more interesting — focusing on targeting assortments or recommendations and promotions to specific customers. The holiday season obviously is a highly promotional time. We think this year we’ll see the continuation of a promotional aspect, but retailers will be much more focused on how to reach different types of customers. “
  11. 11. 11The continued shift to cross-channel browsing and buying has greatly impacted Results from the RSR research report, titled “Retail Pricing In A Post-Channel World,”how and from where shoppers purchase items and receive information. reveal that retailers find the following to be the “top three strategic pricing business challenges:”The Internet ignited the birth of price-comparison shopping. However, theincreased competition for customer attention and dollars has intensified Increased price sensitivity of customers 67%due to the continue proliferation of smartphones. Consumers now can pricecompare with their mobile devices while in store aisles, either via mobile web Increased pricing aggressiveness from competitors 51%or price comparison apps.In fact, approximately 41% of consumers indicated that they have compared Increased price transparency - the impact of comparative price shopping 47%.prices in-store then purchased from another retailer’s physical store, accordingto the “Prosper Mobile Insights Mobile Survey, December-11,” a study co-released by BIGinsight. Moreover, nearly 26% of shoppers compared itemprices in the aisle then purchased from another retailer’s web site via asmartphone or tablet.Due to the influx of information, deals and offers available via web-based Retailers need to hone their competitive skills as they strategize forand mobile tools, accurate and competitive pricing will be paramount for the 2012 holiday season. Lauren Freedman, President, the e-tailingsuccess this holiday season, according to Crames. group, offered the following 4 tips: Retailers should have a…“The competition for consumer attention will intensify, especially because flash ü reater focus on an omni-channel strategy Gsales, curated events and other commerce models have trained consumers Keener lens on how to compete against Amazon and ü to expect something new every day,” Crames said. “The prominent tools for well-heeled retailersbreaking through the clutter during this holiday season unfortunately will bevery driven by price. However, retailers can start to engage their audiences Sharper look at their pricing scenarios ü on different dimensions beyond price well before holidays to capture and ü ommitment to continuing to improve logistics Cbuild excitement that will flow through holiday purchases.”
  12. 12. 12Shoppers are more eager and willing to hunt for deals by searching on the Retailers also can ensure customer loyalty during the holidays by implementingweb, Amazon, eBay and other discount sites to ensure they’re making optimal consistent pricing and merchandise availability across channels. This consistentpurchase decisions. But the competition is heating up, with some sites offering journey will enable consumers to make educated decisions and in turn, haveadditional discounts to incentivize consumers to complete purchases. more pleasant shopping experiences.When its price comparison app was first released, Amazon offered a $5 “Overall, I think retailers are doing well at creating consistent brand messagingdiscount to consumers who scanned and compared items then purchased across channels,” Freed said. “However, they are less consistent on pricingthrough the app. This strategy will come to the forefront this holiday season, strategy and product selection. From a retail perspective, I know they areleading to increased price cuts among retailers, according to Salt. “I fully trying to optimize channels by offering different selections and prices onlineexpect Amazon and potentially others to repeat the holiday season price than they do in stores — sometimes they have to be more competitive onlinecutting from last season,” Salt said. “While this behavior is not sustainable, than in a retail location. But when I go in a store and see a product for $50it does drive consumers away from traditional retail and make them more then check the same company’s web site and find it for $40, it is confusing forprice sensitive.” me as a consumer.”To combat the continual rise of price comparison strategies, Salt recommendsthat retailers focus on differentiating the brick-and-mortar experiencefrom their online competitors. “Retailers must improve the in-store browsingexperience, which is not easily replicated online,” he said, “and increase thesense of personal service from in-store staff.”
  13. 13. 13Today’s digitally empowered consumers value engagement from their preferred retailers and brands, andwill remain loyal to those that deliver a personalized approach. Data analytics can help retailers betterunderstand and respond to this consumer segment. “The smart retailer will focus all its energy on capturingloyalist opt-in and hyper-target this demographic with tailoredmessages,” noted Schwartz.Data collection also can assist in pricing decisions. A benchmark As retailers continue to roll out mobile technology within brick-and-mortar stores,study by RSR Research discussed the importance of Retail particularly in advance of the holiday shopping surge, they also must educate consumersWinners, defined as those whose year-over-year comparable on these new services. Buzek believes retailers who do not instruct consumers on how tostore sales outperform inflation. More than half (62%) of Retail use mobile devices to assist in the shopping experience will see a decline in sales.Winners are collecting data from new channel promotions andusing it to make better pricing decisions. “I suspect there will be more CRM offerings that include Facebook and Twitter accounts as part of the registration process, which will be done through special promotions,” BuzekRSR’s Managing Partner, Paula Rosenblum, shared with Retail said. “Retailers would be wise to take advantage of this process now to gather informationTouchPoints best practices for retailers planning to deploy a from their customers and begin combining it with internal CRM data.”customer loyalty program. “Get your cross-channel housesin order, and focus on customer services and experiences in The biggest change in strategies compared to last year’s holiday season will be in specialtyyour stores,” she said. “Our data tells us that Retail Laggards stores and the store experience. Buzek added: “As specialty retailers move to mobileworry about the competition, while Retail Winners focus on assistance and checkout, customers unfamiliar with this new way of shopping will need totheir customers.” adapt quickly.”Focusing on the customer experience is critical for retailers. Buzek predicts this holiday season to be heavily focused on mobile devices. “RetailersSeemingly, “an engaged customer will be far less likely to walk are scrambling to get their tablets and other mobile devices ready for the holidays,” heout of the store and buy elsewhere,” according to Rosenblum. said. Both during the holidays and throughout next year, “it will be interesting to see what happens with lines, and whether there will be mass chaos as groups of people flock and follow mobile-equipped sales personnel to complete purchases.”
  14. 14. 14The holiday season is a prime time for brands to release new, must-have As customers continue to become the focus of inventory decision-making,items for consumers. By utilizing customer-centric planning and forecasting retailers must have customer-centric processes to avoid promoting andstrategies, retailers can optimize inventory and assortment to decrease out- distributing items that don’t align with their target audiences. By tapping into dataof-stocks on high-demand items and eliminate excess inventory during this across channels, retailers can receive actionable insight on consumers’ mostholiday season. desired items, colors and designs, leading to more efficient inventory planning.“Ultimately, the amount and quality of retailers’ inventory plays a huge role intheir success,” Freed said. “We typically see it having a big impact on thecustomer experience during the holidays, as it will again this year.”Economic uncertainty and the growing influence of price on customer Greg Buzek, President, IHL Group, emphasized that retail companies must bepurchase behaviors persist on deepening that impact. In the report specific and focused in how they approach 2012 holiday strategies. He offeredtitled: The New Imperatives of Retail: Forecasting 2.0, RSR Research suggestions in three areas:reported that “Uncertainty continues to be the watchword for criticalholiday seasons, both for the total spend consumers will commit to, as well 1. If mobile checkout is part of your strategy, make sure you have a strongas which products will reap the benefits.” plan for how to deal with excess shoppers. You had nice organized lines previously…what happens to your store layout, to your customer service styleIn response, best-in-class retailers are implementing enhanced assortment if you move to mobile checkout?planning and merchandising solutions to garner insight on customer purchasehistory, preferences and behaviors to make better inventory decisions. 2. Take advantage of your cross-channel opportunities. Plan for itAccording to Aberdeen Group’s report, titled: Mission-Critical Merchandising promotionally, plan for it on execution.and Replenishment, 39% of merchants are planning to establish their ability 3. Include social media in your marketing efforts. Make a dynamic coupon thatto develop “what-if” scenario-based merchandising plans for assortment, can be tracked available due to a “Like” on Facebook or Twitter. Tie theallocation, markdown and space optimization. Facebook name to the coupon ID in some way so you can begin to link that with your back-end loyalty systems.
  15. 15. 15“We’re seeing more retailers focusing on all channels when they start However, some retailers are not focusing on making all merchandisetheir planning processes,” Morgan-Vandome said, “Previously, they available in stores and across digital channels, which is imperativemay have taken an isolated approach, but now retailers are looking to for success, according to Crames. “Right now, many of thesebetter understand how consumers shop from one channel to another. channels are siloed, with e-Commerce sites running as separateThat way, if something is being purchased online, they can learn how storefronts,” she explained. “This is hard to manage as anto roll that into store planning.” organization because mobile and social span across these units, and force new ways of orienting around the customer.”Retailers also are utilizing more detailed factors, such as weatherand social sentiment to optimize merchandising during the holidays. Rosenblum also indicated the low adoption of distributed order“Some retailers are trying to understand what people are saying management and cross-channel fulfillment. Although these strategiesfrom a social perspective and including it in decision-making for are highly prized by retailers, few actually have the tools andassortment,” Morgan-Vandome explained. “This is still very early in the technologies to leverage them efficiently, she reported. “Having saidprocess, but we’ll see retailers move in that direction and include it in that, we fully expect retailers to do whatever they can to get producttheir customer experience.” into the customers’ hands,” she noted. “No one wants to see a repeat of what happened to Best Buy during last year’s holiday season. ThatMore than half (51%) of retailers are seeking to achieve a “greater means it’s imperative to treat inventorybalance between local micro-merchandising and chain-wide as a shared resource across channels.”assortment needs across all channels,” according to AberdeenGroup research.
  16. 16. 16Chalk it up to the proliferation of technologies and devices, and a fickle Crames added: “We also believe that the acceleration of deals andconsumer mindset — shoppers expect relevant, meaningful interactions, corresponding deal fatigue will make retailers have to work harder thisand retailers are ramping up their initiatives to get more personal with holiday season.”customers. During the holiday shopping season, it will be more critical than Aberdeen Research pointed to the following action items that retailers areever for brands to stand out in the crowd of stores. implementing to optimize personalization initiatives:Particularly due to the breadth of information consistently available totoday’s consumers across a wide variety of channels, customer loyalty andretention have become harder than ever to encourage. The top pressuredriving retailers to personalize the shopping experience is the increasein customer research prior to a purchase, cited by 36% of respondentsto the March 2012 Aberdeen Research report, Hyper-Connected OnlineRetail Personalization. Between their smartphone apps, daily deal sites anddiscount e-Tailers, shoppers really don’t need to frequent one particularstore unless they see a clear value proposition.A key element of current retail strategy conversations is how to developways to use technology to differentiate the customer experience. Halfof the U.S. web e-Tailers in the 2011 edition of Internet Retailer’s “Top 500 Wine.com recently launched a personalization and recommendationGuide” said they were using personalization on their e-Commerce sites, up initiative to present more relevant offers to its online shoppers. Customersfrom 32.6% of retailers that reported doing so the year prior. who log into the site receive unique recommendations based on their“We believe retailers will work to create more personalized and targeted recent purchases, product searches and purchases made by customerspromotions,” noted Crames. “And there is an opportunity for them to deemed similar to them. Shoppers also have the capability to personalizeconnect with groups of consumers effectively using technology and their own profile pages, complete with a picture; recent site activitysocial media to engage audiences and develop and build relationships such as product reviews and searches; and wine club and Steward-Shipwith consumers.” membership information. The eTailer also added a one-click checkout feature to streamline the shopping experience.
  17. 17. 17 ​By initiating a localization strategy, retailers can present special offers and events Progressive retailers also are implementing solutions to analyze customerrelevant to the local environment and shopper. During the holiday shopping data points, including income, point of sale data and web searches to targetseason, the in-store experience is even more integral to revenue optimization. promotions at a highly specific demographic of potential buyers. This strategy is particularly effective during the holiday season.Though a key priority for retailers, localization remains a critical challenge,according to a recent study from RSR Research. More than half (53%) of survey Retailers also are migrating to social and digital channels to providerespondents reported localized assortments as critical to their company to some localization opportunities. “Interestingly, mobile seems to be making thedegree or another. Presenting localized offers is truly a must-do for retailers, biggest positive impact on the smaller retailers, who can get their messagesaccording to industry experts. out to the public for relatively short money, in a pretty intimate fashion,” Rosenblum said. “That’s why Facebook pages, FourSquare and other vehiclesOne of the most effective ways to deliver personalized offers is to shoppers’ are important: They get really local. I think consumers actually are rootingsmartphones. “Retailers must be able to deliver localized content, location- and for the smaller retailer, and if that retailer can catch their attention, and becustomer-specific offers, enterprise-wide inventory, and rich product content to reasonable on price, there’s a lot of opportunity.”the smartphone of every shopper before, during and after they enter the store,”noted Bruno. Store-based retailers are rolling out localization strategies ü with the knowledge that these programs can be veryBoth small, regional retailers and large, national brands are taking advantage of localization strategies. effective traffic drivers;Sears recently launched SearsLocalAd.com, an online service designed to provide customers with accessto additional local deals beyond its web offers and weekly Sears print circular. The online shopping portal is Localization is a tool that store-based retailers are using ü dedicated to local customers, allowing them to shop smarter by previewing new local deals updated every to differentiate themselves from the more convenientweek, and includes enhancements for Sears’ Shop Your Way loyalty program members. shopping options provided by e-Commerce players;Localization is pre-selected based on the shopper’s location and can be changed to another store withinthe experience. Shoppers can search their nearest Sears store and browse deals by department, brand Most importantly, localization transforms the perception ü or price point, and filter it to find offers of interest. SearsLocalAd.com helps shoppers ensure products are of a store from a cold, money-hungry national retaileravailable before they go to the store. The web site also shows in real time how many items currently are in into a community store.stock at the chosen location.  (Source: Sean Deale, Retail Industry Analyst at RetailNet Group LLC “5 Ways Chain Retailers Are Localizing Their Stores”)
  18. 18. 18 Retail TouchPoints is an online publishing network for retail executives, with content focused on optimizing the customer experience across all channels. The Retail TouchPoints411 State Route network is comprised of a weekly newsletter, special17 South,Suite 410 reports, web seminars, exclusive benchmark research, andHasbrouck Heights, NJ 07604 a content-rich web site featuring daily news updates andP: 201.257.8528 multi-media interviews at www.retailtouchpoints.com. TheF: 201.426.0181 Retail TouchPoints team also interacts with social mediainfo@retailtouchpoints.com communities via Facebook, Twitter and LinkedIn.