From lockdowns to e-commerce booms, retailers have had a challenging year in 2020. As we approach the end of the year busy season for retailers, many questions remain over how this holiday period will compare to those of previous years, writes Jason Toshack, General Manager ANZ at Oracle NetSuite.
It’s all about perspective
The outlook will depend largely on your own point of view. For example, an Australia Post report revealed that August was a record-breaking month for eCommerce, with online purchases up 8.9 per cent compared to the 2019 pre-Christmas peak. On the other hand, McKinsey reports that while household spending has increased recently, more than one-quarter of Australians are pessimistic about economic recovery – the highest since the onset of COVID-19.
Whether shoppers embark on some much-needed retail therapy or tighten their belts this holiday season, here are three things retailers can do to help them make the most of the end of year shopping period.
Inventory, inventory, inventory
It’s no surprise that having inventory on hand is crucial to capitalising on the peak trading season, however additional inventory planning and preparation will be required this year. Global supply chains have recovered somewhat, however many businesses may be caught unprepared if they do not take precautions, including:
- Use data to your advantage – data and insights are crucial in times when agility is paramount. Gut-led decision making won’t cut it when shoppers expect products and services to be available in a timely manner. Use data to uncover spending habits and the flow-on effect to inventory levels to assist with inventory planning, preparation and management. For example, some businesses are anticipating longer sales cycles and need to prepare their warehousing solutions accordingly.
- Consider the challenges your leading supplier may experience – work with your key suppliers to understand their ability to meet demand, especially during the peak trading season.
- Have a Plan B – while these supplier challenges should be a priority, it is advisable to have a backup plan. Explore secondary supplier relationships that could be mobilised very quickly if demand outweighs supply.
Customer experience is everything
Between March and August 2020, “over 8.1 million Australian households shopped online, an increase of 16% when compared to the same time last year,” according to Australia Post. Of these shoppers, 900,000 were new to ecommerce and over two-thirds have continued to buy online in recent months. While lockdown restrictions may ease, it is safe to say that many people will still prefer to shop online. Whether serving a customer in-store or online, customer experience can be ‘make or break’ for retailers this festive season.
- For in-store shoppers, customer safety remains paramount. Think about ways to manage high-traffic areas in store by using one-way aisles, offering contactless payment options for a speedy checkout and even creating ‘VIP’ sessions where shoppers can book to come in to store at a pre-set time.
- For online shoppers, ease and speed reign supreme. One in five shoppers in August purchased their goods or services from an alternative online supplier because the product was in stock and immediately available. This shows that shoppers are not afraid to look elsewhere if they cannot find the product they want, at the speed they want it. Additionally, almost 70 per cent of online shopping carts are abandoned, mostly due to extra costs encountered at the checkout step. Being fully transparent about costs and delivery times upfront will go a long way to converting sales.
Align your team
The end of year shopping period is no longer restricted to December, with shoppers taking advantage of multiple ‘events’ within the season, including Black Friday, Cyber Monday, Mid-Season, Christmas, Boxing Day sales and beyond. The takeaway? It’s a long season for teams to be switched on and delivering high-quality service. The strains of the year are already taking their toll, with the National Retail Association reporting that some businesses have endured a “400 per cent increase in aggression and abuse following customer anger at retail restrictions.”
Now is the time for leaders to rally their teams, for example, by making sure that the team is aligned on immediate priorities. Increase the number of 1:1’s to check in with staff and see how they are going. Offer additional training and support where needed. Most importantly, mental health concerns have been heightened during the pandemic, so resources such as those offered by The Black Dog Institute can support the team when they need it most.
While it’s impossible to predict how the end of year shopping season will pan out, there are three things retailers can do to make the most of increased activity. Use data-driven insights to forward plan inventory levels, optimise the customer experience in-store and online to convert sales, show empathy, and support the team when they need it most.
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