How Retailers Prepare for the 2020 Holiday Season Amid COVID-19 Pandemic

What once was expected to yield retailers’ biggest boost in sales for the year, the holiday season could look a lot different in 2020. The online shopping surge sparked by the pandemic changed consumer habits, perhaps forever. And with the holiday season on the horizon, retailers need to prepare. Retailers can use the lessons learned from the spring lockdown to take two key steps: reimagine their clienteling and use cloud communication strategies to make the most of the 2020 holiday season.

How Retailers Prepare for the 2020 Holiday Season Amid COVID-19 Pandemic
How Retailers Prepare for the 2020 Holiday Season Amid COVID-19 Pandemic. Photo by Arturo Rey on Unsplash

In this article:

  • A look at key lessons learned from the first lockdown can provide insight and help retailers plan for the holiday season
  • Retailers should consider the need for agility, the importance of communication, and the ability to offer both in-store and online clienteling that will create a memorable experience for their customers
  • Treating communication like a command centre issue, and the advantage of using omnichannel cloud-based communication platforms to interact with customers

Table of contents

Introduction
Learning from the first lockdown
A lack of communication confused customers and employees
Retailers with a digital presence pivoted first and better
The lockdown exposed retailers’ “preexisting conditions”
What will the holidays bring?
Urgency and effectiveness of clienteling
In-store clienteling
Online clienteling
Developing a cloud communication strategy

Introduction

Usually, retailers expect the holiday season to yield their biggest boost in sales for the year. To prepare, they typically focus their marketing strategies on customer acquisition. After all, only two years ago, holiday sales were up 3.4%, and the average customer spent $1,000 on gifts, travel and indulgences.

But the fourth quarter of 2020 will be a far cry from the holiday seasons of yesteryear. The long and unprecedented closure of nonessential retailers was effectively an accelerant for the preexisting takeover by e-commerce. Moody’s analysts found that U.S. domestic online sales growth outpaced retail store sales by 15% last year.

Now, the online shopping surge, sparked by the pandemic, is “forever changing consumer habits,” with Moody’s projecting online sales to surpass 25% of all retail sales over the next five years. According to census statistics, e-commerce sales were up nearly 45% year-over-year in the second quarter of 2020 while retail sales overall were down compared with last year.

This year, instead of thinking about the holiday season as the traditional period of thriving, or even as a time of recovery, retailers must look at it as a season to put their best strategies forward to meet the new challenge of a pandemic holiday season. This is uncharted territory and requires retailers to be proactive. However, there is some guidance: Retailers can use the lessons learned from the spring lockdown to take two key steps: reimagine their clienteling and use cloud communication strategies to make the most of the 2020 holiday season.

  • Online sales to surpass 25% of all retail sales over the next five years
  • E-commerce sales were up nearly 45% year-over-year in the second quarter of 2020
  • U.S. domestic online sales growth outpaced retail store sales by 15% last year

Learning from the first lockdown

Success in sales and revenue is not guaranteed, but retailers can take essential steps to respond and adapt to an unpredictable 2020 holiday season.

A lack of communication confused customers and employees

“With the initial shutdown, there was a sheer need for the right amount of communication, not just to personalize the communication to the audience, but to provide frequent communications, as this was a constantly evolving and changing state,” said Mauro Failli, senior global CX consultant for Twilio Foundry.

Rules frequently evolved, state to state, and even store to store, he said. Retailers established special shopping hours for vulnerable populations. Some recommended masks; others required them. Stores limited customer count. As these changes occurred, customers needed frequent, up-to-date communication to know what to expect.

The need for current news was just as great for employees, Failli added. Without an official shared resource for receiving updates, it was difficult for employees to know what to expect and what to convey to customers regarding safety measures, cleaning protocols or when essential items would be back on the shelves.

Retailers with a digital presence pivoted first and better

With most physical retail stores shut, consumers had little choice but to shop online. Retailers realized the importance of omnichannel, but in a survey of retail decision-makers, half reported that they did not adapt their digital communication strategy in response.

As some restrictions eased, retailers began adding buy online, pick up in-store, which allowed some brick-and-mortar stores to use their inventory for curbside pickup. While others, including those in malls with no curbside access, couldn’t take advantage.

“ When stores provide more ways to communicate, answer consumers’ questions and provide personalized services, consumers are more trusting.” – HOLDEN BALE, GROUP VICE PRESIDENT AT HUGE

Retailers didn’t just need to provide multiple channels for shopping; they needed to integrate those channels, said Holden Bale, Group Vice President at Huge, a full-service digital agency. The pandemic highlighted the need to rethink physical retail and the blend between e-commerce and physical.

Especially during the initial lockdown, mobile shopping surged, consistently surpassing even traditional holiday shopping. “If it wasn’t obvious before, everyone needs to think mobile-first,” Bale said. Research from Huge found that 62% of users want more insight and more certainty of what’s in stock in stores. In particular, consumers don’t trust the page on the retailer’s site that shows an item is available.

“When stores provide more ways to communicate, answer consumers’ questions and provide personalized services, consumers are more trusting,” Bale said.

The lockdown exposed retailers’ “preexisting conditions”

The pandemic amplified vulnerabilities in retailers as well. “If you came into this crisis with a preexisting condition of a tremendous amount of debt or an overreliance on physical stores to distribute your products, COVID-19 found you. If you were an ailing brand that was losing equity with consumers or a brand that found itself in a troublesome channel, like a department store, COVID-19 could suss that out as well,” said Doug Stephens, founder and CEO of Retail Prophet, an industry consultancy.

Even if retailers escaped the pandemic relatively unscathed, changes occurring now will have long-lasting effects on the industry. Now is the time to address any weaknesses, he said.

62% of users want more insight and more certainty of what’s in stock in stores.

What will the holidays bring?

Economists and experts agree that the economy won’t recover until the coronavirus pandemic is contained — without triggering another wave of infections as lockdown measures are softened. Recurring surges in coronavirus cases will continue to keep consumers wary of public attractions, such as movie theatres and mini-golf.

“What matters more than anything right now is agility. Business agility. Digital agility,” Bale said. Part of that agility requires that retailers establish and maintain a relationship with their customers, wherever they are, no matter how they choose to shop. This effort goes beyond creating an omnichannel presence. To develop that connection with customers, to be agile and adjust to their changing needs, retailers must focus on clienteling.

“As we approach 2021 without a clear sign of when this pandemic will subside, retailers need to be resolute in prioritizing flexibility to future proof business continuity. Planning into post-pandemic recovery will require that brands have adaptable and scalable customer engagement.” added industry marketing manager Alex Bravo.

With that dire but likely scenario, retailers should prepare for fluctuations in restrictions that may cause brick-and-mortar stores to shut again or work under limited occupation. Cities, state sand regions could face varying restrictions, so national retailers need to prepare their stores for local changes.

Some consumers will continue to shop primarily online, but others will crave social interaction. Retailers need to make customers comfortable in either scenario.

Consumers will also buy more purposefully. Failli added, “I think about my own experiences when I’m shopping for a retail item. When I’ve done my research, I know what I want. I go out and shop for the best price now.”

Urgency and effectiveness of clienteling

Clienteling is the practice of providing boutique-level personalized experiences to customers. Initially, clienteling was an aspect exclusive to luxury retailers. Now the paradigm is changing.

“The notion of clienteling has to become more mainstream because now the store experience alone is no longer enough to help customers discover products or feel connected to the retailer and their products,” Bravo said.

“Clienteling is almost like having a little black book of business,” Failli added. A retailer might advise the best way to use a product or service, get to know the customer’s personal preferences, and recommend a purchase. “Providing that differentiation now is especially effective.”

In-store clienteling

While shoppers may crave human contact, concerns for personal safety need to be honoured. Retailers can create a more high-touch experience by contacting consumers with their store’s sanitation protocol and safety standards and offering private appointments. Imagine, for example, a clothing retailer that selects items based on recent purchase history in advance of a customer’s private shopping appointment.

Online clienteling

With more customers shopping online, creating a memorable experience is crucial in standing apart from competitors. Retailers like Chanel and Ulta Beauty, bring beauty advisors and sales associates online for virtual appointments. “Other companies can do more to expand their customer service in every aspect, even in fulfilment,” Bravo said.

If a customer places an order online and the item becomes unavailable, instead of sending the customer a standard “Sorry, we’re out of stock” email, the retailer could connect with the customer, suggest a comparable or even higher-cost option, and honour the price.

“To move inventory, brands need to connect with customers in real-time via SMS, WhatsApp and even a phone call. The immediacy of the response should reflect sympathy for a disappointed customer. This strategy is especially needed for favourite holiday purchases, such as electronics and game consoles.

“If you look at clienteling in a silo, you’re missing the point.” – HOLDEN BALE, GROUP VICE PRESIDENT AT HUGE

That’s another way of accelerating clienteling, by making use of your stores and balancing meeting customer needs and employees’ sales objectives,” Bravo said.

Customers ordering from 1-800-Flowers are usually buying flowers for a special occasion, so it is imperative that the order arrives on time and looks beautiful. But it can be difficult to order flowers sight unseen. 1-800-Flowers uses online clienteling to help customers select flowers with online chats, one-on-one videos and online photo sharing with retail associates. The florist also provides customers with frequent updates in the delivery process and makes it simple for customers to modify their orders and connect with live agents.

“When retailers consider the benefits of clienteling, they should think holistically about results. Besides thinking about revenue gained from clienteling, look at NPS, mindshare and social sentiment,” Bale said. But clienteling is more than one aspect of retail. “If you look at clienteling in a silo, you’re missing the point. Clienteling is another point where we are expected to show up as business leaders and as brands and as companies who are in service of a consumer, and we need to be there for them. And that should be a rising tide that lifts the entire business. It should amplify the existing value proposition of the business,” he added.

Effective clienteling requires that retailers communicate with customers and employees. Especially when information can change rapidly, retailers need to have efficient and agile communication strategies.

Developing a cloud communication strategy

Does a store offer special shopping hours for vulnerable populations? How have the most recent changes in restrictions affected a retailer’s operations? What can customers expect if they want to buy online and pick up a purchase? The answers to these questions can change from day to day and even from hour to hour, yet providing this information to customers is an essential part of clienteling.

Retailers using omnichannel cloud-based communication platforms have the advantage of interacting with customers in a variety of ways, even if store locations are closed. Rapid, reliable communication with customers and employees helps organizations quickly adjust to shifting conditions. In March, when most restaurants were closed for in-person dining during COVID-19, delivery orders soared 67%. DoorDash used its cloud-based communication platform for notifications and call services between restaurants, dashers and customers to take on this massive increase. Since the COVID-19 outbreak, DoorDash captured a 46.5% share of the food-delivery market in the United States.

Companies need to treat communication like a command centre issue. “The companies that have performed best from a communication standpoint have literally set up command posts, where they are feeding insights and relevant information at the moment to the people in their organization,” Stephens said.

In March, when most restaurants were closed for in-person dining during COVID-19, delivery orders soared 67%.

Although companies may hesitate to add new technologies in such uncertain times, this could be a make-or-break decision. “It’s vitally important that we not lose customers during a time when it’s incredibly difficult to gain customers,” he added.

As retailers plan for the uncertain holiday season, they need multiple plans and must quickly implement the most appropriate one at the time. One thing is certain: Creating critical connections to employees is essential and will ultimately be necessary for retail survival. Communicating with customers and employees helps retailers interact in an authentic way that strengthens relationships for the present and the future.

  • Creating critical connections to employees is essential and will ultimately be necessary for retail survival
  • Communicating with customers and employees helps retailers interact in an authentic way
  • Strengthen relationships for the present and the future

Source: Industry Dive Brand Studio

Published by Jeannette Scott

, a wellness coach specializing in stress management and quality of life. She’s covered topics from nutrition to psychology, from sexuality to autoimmune diseases and cancer.