Click to learn more about author Hamaad Chippa.
With “Back 2 School” season over, retailers are now focused squarely on the crucial holiday shopping season. This includes planning and developing products influenced by customer demand, aligning important suppliers, capacity planning at warehouse and distribution centers, prepping traditional and digital sales channels, and developing key marketing insights. According to eMarketer Retail, total revenue during the 2017 holiday shopping season is expected to increase two percent from 2016. This is down from the almost five percent growth that was experienced in 2016; however, retailers are optimistic that the positive economic climate will help boost sales.
Marketing and outreach for the holiday shopping season has started earlier and earlier over the past few years. While more than 68 percent of purchases are still made in November and December, more than 50 percent of consumers begin their holiday shopping research in October or earlier. To remain competitive and top of mind to customers, retailers must quickly analyze sales history from prior holiday seasons, market demands, and consumer preferences to ensure they are properly prepared with the right message, products and services, and engagement model for a successful shopping season.
Integrating, curating, and analyzing key data elements are vital to help retailers plan for the impending shopping season. Below are best practices that can help each business unit leverage data to identify and successfully execute on sales opportunities.
Merchandising / Product Planning
Reviewing historical sales data from recent holiday seasons is important to understand how certain products performed against forecasts. However, it’s not enough to review aggregated transactions. Retailers should break down data by sales channel (e.g., mobile, website, brick and mortar, phone orders, etc.) and regional location to truly understand consumer demand and preference. To do this, retailers must be able to integrate data from all sales channels in a quick and efficient manner. If sales data is unavailable, siloed or captured in various formats, cleansing and analyzing the data can be time consuming and error prone, potentially leading to inaccurate insights.
Supply Chain and Logistics
Leveraging the historical sales data discussed above can also help predict how much inventory is needed and where. Time is of the essence during the holiday shopping season and retailers cannot afford to be wrong on purchasing and stocking products. Suppliers are key in helping to manage production and inventory levels. Retailers need to rely on trusted partners that can deliver to forecasts. Analyzing supplier performance history (products ordered vs. delivered and acceptance rate) will help determine which suppliers to trust and those that should be replaced. This is particularly important to identify early as incorrect inventory planning can result in missed revenues, increased costs (excess inventory or expedited shipping to areas of need), and diminished customer satisfaction.
Data collection across Customer Relationship Management (CRM) tools, point-of-sale systems, loyalty programs and external sources (social media, web crawls, etc.) is pivotal to helping marketing teams develop segmented and personalized messaging to customers. Orchestrating and analyzing this data holistically enables marketers to pin-point niche segments based on shopping habits, purchase history, and browsing patterns – providing a unique and carefully curated shopping experience. According to a study conducted by the Boston Consulting Group, companies that use data to develop personalized messaging and experiences see a six percent uptick in revenue.
With eCommerce sales increasing to nearly 13 percent of total holiday revenues, loading products with key attribute data on digital sales channels is critical to drive sales conversions, whether it be in the store or on the web. Using smartphones to comparison shop is a reality that retailers must embrace. Today’s savvy shoppers recognize companies that make comprehensive product data readily available, as this helps them make informed purchasing decisions. Providing easy access to this information will likely result in a sale for the retailer. Unfortunately, merchandisers, marketers and e-commerce teams typically create product data independently, which can result in discrepancies across sales channels. By managing product data in a central location, stakeholders can leverage standardized information to stay on message, thus ensuring accurate, consistent information is reaching the customer from all sides.
Open lines of communication with customers is key during the shopping season. Recently, chat bots and other artificially intelligent capabilities have been implemented as a real-time, low-cost method of answering customer questions. Customer Services Reps (CSRs) need fast access to customer and product data to address customer needs. Whether it’s identifying a product’s availability or helping a customer with an issue, having data at their fingertips is necessary to maintain customer satisfaction and drive sales. Retailers must not ignore CSRs as a key interaction point for customers when determining data needs.
To ensure a successful holiday shopping season, retailers should begin assessing the availability and health of their sales, customer, product and supplier data now. Integrating these key data elements, and making them easily accessible to stakeholders across the organization, will determine if retailers can expect a joyous holiday shopping season or a lump of coal in their stockings.