5 Strategies to Shake Up your Holiday Retail Playbook

Retailers hope real-time personalization, augmented-reality, and other technologies will put a fresh spin on holiday sales.
Customer Strategy

It's the middle of August, which means retailers only have a few months left to prepare their campaigns and map out their customer strategies in time for this year's holiday rush.

Having an effective strategy in place will be particularly important because the end of 2016 is expected to be a very competitive holiday season. Total retail holiday season sales will only increase 1.8 percent from last year, according to eMarketer, therefore retailers will have to work hard to differentiate themselves from their competitors. And while there isn't a one-size-fits-all customer strategy, here are five initiatives worth exploring:

1. Reliability + Innovation
Customers want reliable service, but they also want to be (pleasantly) surprised with new experiences. Trumpet & Horn, an online jeweler, understands this and tries to balance both expectations. For example, the company quickly learned the importance of avoiding site crashes.

Prior to working with a cloud-based hosting company, unexpected spikes in traffic would inevitably cause the company's website to crash, says Hannah Marlin, digital communications manager at Trumpet & Horn. Last year, the company implemented Webscale, an auto-scaling cloud application delivery platform. The new platform enables Trumpet & Horn to manage sudden upticks in visitor traffic, such as when Olympic swimmer Michael Phelps posted a photo of a Trumpet & Horn ring he had purchased on Instagram and Twitter and tagged the jeweler, sending many new visitors to the company's site.

"We saw our traffic rise rapidly, but because we were prepared we were able to rejoice in this moment and breathe easy," Marlin notes. Trumpet & Horn will continue to monitor its cloud deployment during the holiday season, including Cyber Monday, and is considering adding Webscale Disaster Recovery to its tools, which is designed to keep a website running even if the cloud provider were to go down.

In addition to the practical matter of website support, the jeweler is also working on an augmented reality experience for the holidays. "We are in the process of collaborating with the app Beaumade, which will allow users to virtually try on a number of our rings through their smartphone," Marlin says. "We're really excited about this collaboration."

2. The Rise of Beacons
ABI Research forecasts 8 million beacons-devices that transmit a Bluetooth signal to other Bluetooth enabled devices in the general area-will be deployed globally by the end of 2016 and 400 million by 2020. Beacons offer more opportunities for retailers to connect with consumers on their smartphones.

For example, beacons have been installed at more than 100 stores including Burberry, Hugo Boss, and Coach on Regent Street in London. Additionally, autoGraph, a mobile marketing technology firm which installed the beacons, lets shoppers who have downloaded the Regent Street app create a profile of their style and brand preferences, which retailers use to target the offers that are delivered to shoppers.

"We score the profile against the content that's being offered and only those that have a match of 95 percent or higher get sent to the consumer," explains Henry Lawson, CEO and co-founder of autoGraph. "This way retailers aren't bombarding shoppers with offers they're not even interested in."

The strategy appears to be working since Regent Street stores that participate in the beacon strategy experience an uplift in offer redemptions that's 10 times higher on average compared to other offers.

In the U.S., CVS Health began using beacons last year to send real-time notifications, like a reminder to refill a prescription, or alerts when the prescription is ready to be picked up. Target deployed its own beacon pilot soon after CVS Health and Rite Aid began rolling out beacons across its 4,500 stores this year.

Consumers can expect retailers to deploy beacons as part of their holiday strategy as well, but beacons may not make sense for every company. A survey conducted by Forrester reported that only 3 percent of retailers use beacons and only 16 percent had plans to try the technology in the near future. "Despite huge interest and numerous successful pilots, we have yet to see very many successful commercial rollouts," writes Forrester analyst Thomas Husson in a November 2015 blog post. "This is not so much about the technology but primarily because reach is limited today and because few marketers can deliver smart contextual messages at scale." In other words, beacons can be a worthwhile investment, but only if retailers put in the work to develop an effective strategy for utilizing it.

3. Advanced Personalized Experiences
In a survey of 500 marketers, Rapt Media, a video marketing firm, found that 75 percent of the respondents believe there's no such thing as too much personalization for different audiences, and that 94 percent know that delivering personalized content is important for reaching consumers.

While marketers understand the value of delivering personalized experiences, the bar continues to rise-personalized emails are table stakes-and marketers have to continue finding relevant ways to connect with their target audience, notes Michele Dupré who leads the retail and hospitality practice for Verizon Enterprise Solutions. "We're at a point where email personalization is a standard but there's still room for even deeper personalization and so this isn't a time for marketers to sit back, but rather work even harder to create engaging content," Dupré says.

Kathy Menis, senior vice president of marketing at Signal, a cross-channel marketing technology firm, shares Dupré's sentiment. For example, instead of assuming that mobile campaigns are the best way to reach consumers, "step back and analyze what you know about your customers to make sure you're creating experiences that fit their needs," Menis says. "For example, we already know shoppers don't think in channels, so make sure you're creating a consistent experience through all the relevant channels."

One way to create a more personalized experience is to connect online shoppers with in-store associates. Salesfloor, for example, is a startup that offers online shoppers the ability to connect via live chat and email with associates from their local store. When a customer visits the retailer's website, Salesfloor Connect looks up the customer's location and offers to connect him or her with associates at the nearest store.

"Once connected, real-life associates can provide personalized service and expert advice, no different than if you were in the physical store," says Salesfloor CEO Oscar Sachs. The associate, for example, can let the customer know which merchandise is in stock at the store and when it's ready to be picked up. The company's clients include Harry Rosen, Neiman Marcus, and Lord & Taylor. Not all customers may care whether an associate is in their town or another country, but it's a potential way to create a connection between the in-store and e-commerce experience.

4. Convenience
Holiday shoppers are inevitably short on time and the sooner they can check names off their lists, the better. Savvy retailers understand the importance of offering shopping experiences that are simple and convenient in addition to allowing customers to shop the way they want to. Retailers can therefore stand out by offering seamless options for buying and returning items.

In addition to free shipping, customers are also searching for convenient pick-up options. For example, a study by Deloitte found that 13 percent of shoppers use the 'buy online, pick up in store' method to purchase and pay for their items and one out of four consumers indicated that this is their preferred method for receiving their purchases. Furthermore, nearly 20 percent of shoppers would like to initiate a product return or refund from their personal digital device.

5. Data Gathering and Analysis
Besides enabling personalized offers, data analysis is critical for identifying insights into customer preferences and trends that could affect business decisions in the following months. "Year over year we've seen retailers home in on their craft of identifying who their customer is and act [on those insights]," Dupré says. Even though the holidays might be too busy a time to test and deploy new analytic tools, data analysis is becoming a key differentiator, Dupré warns. Furthermore, the holidays is an ideal time for gathering more first-party data like email addresses and other useful information, Menis says. "The holiday season is not just an opportunity to get customers," she adds. "It's also the biggest data gathering event of the year."

Squeezing sales and profits out of the holiday season becomes more challenging each year as the retail landscape grows more competitive. However, the retailers who approach the holiday season with a short-term strategy for driving sales as well as a long-term strategy for collecting data and building customer relationships will still come out on top.