Holiday retail boom shows need for new cross-channel tactics in 2018
Omnichannel holiday shoppers outspent those who shop only online or in stores
Soaring sales in the just-concluded holiday season provide strong evidence that traditional retailers need to change their tactics in 2018 if they want to keep up with their customers—and ahead of their competitors.
Retail sales jumped 5.5% to $691.9 billion from the year before, according to data from the National Retail Federation. That figure easily surpassed the foundation’s forecast of up to $678.8 to 682.0 billion.
The average spend was $335, with older millennials outpacing the pack at $420, according to an earlier NRF study conducted with Prosper Insights & Analytics. However, the numbers get even more interesting when you look at shoppers who spent their money online, offline, or both—and therein lies a lesson for brick-and-mortar retailers who worry that the ghost of Christmas future may resemble Amazon’s Jeff Bezos.
The 64 million customers who shopped both online and in stores over the Black Friday weekend spent $82 more on average than the 58 million who purchased goods online only, that study found. The omnichannel buyers also spent $49 more than 51 million customers who shopped only in stores. By mid-season, 52% of shoppers rated their in-store experiences very good or excellent compared with 69% who felt that way about shopping online, Prosper found.
Considering the rapid growth in online retail, which the Commerce Department estimates at 9.1% of the U.S. market, it would seem prudent for brick-and-mortar retailers to invest in omnichannel technologies that will let them to see the greatest increase in sales in coming years. A 2016 study published in Harvard Business Review found 73% of shoppers were already skipping across channels during their customer journey.
Those omnichannel shoppers—particularly those fast-spending, tech-savvy millennials—expect merchants to show consistency as they shop on their phones, online, or in the stores. And merchants who can deliver just the right encouragement at the right time have the best chance of nurturing those customers from acquisition to transaction and then retention.
Engaging with customers on both online and offline channels is rapidly become the standard in the retail industry, which is why the biggest data-driven e-commerce giants like Amazon and Alibaba have recently started investing in offline initiatives.
Technology can benefit all retailers, not just the likes of Amazon. Modern commerce systems like those from Sitecore can use all the data available on the customer—to understand what information that individual may need, to personalize marketing messages based on that information, to incentivize that shopper with promotions, and even to guide them to the nearest store. And when an in-store shopper uses their phone to hunt around for a better price or a different model, the same systems can help nudge the customer toward conversion with, perhaps, a timely discount or a relevant product review.
The retail landscape is rapidly changing based on innovative technologies, competitive pressures, and increased expectations from consumers. Retailers must reflect that change in their playbooks as they start planning for the 2018 holiday season.
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Wanda Cadigan is Vice President, Commerce at Sitecore. Find her on Linkedin.