Though the holiday season has come and gone once again, retail data acts as the gift that keeps on giving. Post-holiday information provides leaders with insight into which strategies succeeded and which areas still need work.
According to MasterCard SpendingPulse, retail sales grew 7.9 percent year-over-year between Black Friday and Christmas Eve 2015, while the National Retail Federation (NRF) reports that shoppers spent $630.5 billion during the winter holiday season overall. Yet, while improved sales data indicates that retailers are on the right track, many face numerous challenges in the year ahead. Instead of viewing the holiday season as an isolated microcosm, retailers must look to these underlying issues for guidance throughout 2016.
Here are three notable trends that retailers must consider as they strive to establish and develop strategies that keep customers coming back for more all year long:
Omnichannel experiences continue to satisfy the average shopper's need for seamless brand interactions
Signal's recent infographic highlights the fact that omnichannel experiences have become an expectation, not an exception. The study reveals that 91 percent of customers want to pick up where they left on when they switch between channels and 50 percent expect to be able to buy their items online and pick up their order in-store shortly after. However, 94 percent of retailers face significant barriers when it comes to developing an integrated omnichannel strategy. Yet, while less than 20 percent of retailers have fully synchronized their customer channels to create a true omnichannel experience, leaders are beginning to understand how vital channel integration can be after the study showed how omnichannel shoppers have a 30 percent higher lifetime value than those who shop using only one channel. Retailers must buckle down and hone their strategies, because online and digitally influenced retail sales will likely reach $1.8 trillion by 2017.
Free shipping offers influenced purchase decisions, but carriers couldn't meet consumer demand
Ninety-three percent of shoppers planned to take advantage of free shipping offers this year, according to one NRF survey. In fact, of those polled, 47 percent said that free shipping availability dictates where they'd buy their gifts. But, as an article by The Atlantic notes, shipping companies still aren't poised to meet the growing demand for fast, on-time deliveries. Between Thanksgiving and New Year's Day, UPS expected to deliver 630 million packages, up 10 percent from 2014, and FedEx expected to deliver 317 million packages, an increase of 12.4 percent over last year. Yet, while UPS and FedEx continue to improve reliability, expanding their on-time delivery rates to more than 90 percent each, even this shrinking margin of error indicates that millions of packages didn't arrive at their destination as scheduled. This shortfall breaks the consumer's trust in both the retailer's promise and the carrier's reputation.
In-store returns and exchanges are preferred, but fraudulent transactions will likely cost retailers billions
Retale's recent report indicates that 24 percent of consumers surveyed expect to return or exchange at least one of the gifts they've received this season, as most claim they don't need the item (44 percent), the item was defective (34 percent), or they'd rather have store credit (9 percent). Overall, the majority of these respondents prefer to return or exchange gifts in-store, while only 12 percent prefer to do so online. However, the NRF's latest Return Fraud Survey indicates that retailers estimate 3.5 percent of all holiday returns this year will be fraudulent, ultimately costing companies $2.2 billion-up from $1.9 billion last year. Retailers must remain vigilant throughout the year, as well, for they estimate that annual returns for 2015 will amount to $260.5 billion, of which $9.1 billion likely will be fraudulent.
Overall, the holiday shopping season provides retailers with condensed lessons on how to expand customer strategy in the year to come. By looking at this small portion of the bigger picture, retailers can gain clear insight into which areas truly need their attention all year long.