November 6, 2017 | Written by: Michael Haydock
Categorized: Cognitive Retail
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It’s that time of year again. The 2017 holiday season is looming large and speculation is in full swing as to how the next eight weeks will play out for retailers and consumers alike.
There’s good news to report. Based on my annual Holiday Forecast, we predict the 2017 season will grow nearly three percent over the 2016. And once again much of the focus will be on the continued explosion of online shopping—we expect online sales to be up more than 12.5 percent over 2017.
In addition to these figures, there are three sectors where I expect to see significant growth over this timeframe. These include:
- Men’s Apparel: Holiday shopping we expect that sales of men’s apparel will increase 7.7 percent this holiday over 2016.
- Home Goods and Building Materials: Over November and December, I expect the home building retailer sector will see sales grow by 7.5 percent over 2016 and sales of home goods to rise 4.6 percent over that same period.
- Jewelry: Purchases of jewelry have been up significantly all year and that should continue this holiday with sales up 5.2 percent over 2016.
Commit to Innovation
These figures are certainly welcome news for the industry, but at a time when flawless execution and personalized experiences and services are the new gold standard, they don’t guarantee success for all retailers this coming holiday season. What does guarantee success? It’s simple: preparation and a commitment to innovation.
Over the last several months, have retailers made sufficient innovation investments to ensure that their site can handle the massive influx in traffic? Will their supply chain be able to deliver packages in the time frame promised or allow for same day pick up at the local store location?
And what about weather? Do U.S. retailers know that southern regions will have mildly warmer temperatures this holiday season and as a result they will likely not see an early spike of shoppers but rather a steady stream that extends over the full season? And when customers come into the store, can retailers mirror the same high-touch personalization and efficiency that they offer online?
Serving customers today is challenging and perhaps the area where retailers struggle the most is in the store. One reason for this is that brick and mortar businesses have experienced a steady decline since 2000 and many retailers have reacted by scaling back on in-store investments. But, like fashions that come back in style, so too is the store. Take Generation Z—according to an IBM study, new generations such as Generation Z overwhelmingly prefer to shop in the store but they do have some demands.
According to our research, Generation Z shoppers want retailers that can match enhanced and personalized customer services with great deals. These service innovations can come in many forms. For example:
- Mobilizing In-Store Associates: By arming your teams with mobile devices, they can gain instant insights into the customer based on past visits and their online interactions with the brand. With these insights, store representatives can quickly help them find what they need right then and there. According to the IBM 2017 CEI Study, 79 percent of brands do not have mobile-enabled associates or do not provide their associates with mobile access to customer information. What if a retailer’s top competitor is doing is doing just this? It’s possible their loyal customers may be shift allegiances this holiday.
- Eliminating Long Lines: If you’ve experienced Black Friday lines, you’ve experience true retail frustration. If not, you’ve seen the chaos on the local news. Long lines don’t exist online and they shouldn’t in stores either. Today, retailers can arm teams with mobiles devices that check people out from right there in the aisle. Then there are digital wallets. Did you know that 14 percent of Chinese citizens do not carry any cash? They use their digital wallet. Here how it works—Using Near Field Technology, customers can literally exit the store with items in hand and the with charge being automatically applied to their digital wallets. With that type of capability, the line to enter the store may be larger than the one to leave.
- Mobilizing In–Store Showrooms: Showrooms give customers the opportunity to touch, feel, try on and familiarize themselves with the brand and its products while at the same time, allowing retailers to save on overhead costs, such as inventory and cost per foot. But that’s just part of it. Retailers can take it one step further by allowing in-store associates to use their mobile device to gain access to all the information a customer would have online – personalized recommendations, size charts, warehouse inventory, customer shipping preferences, purchase histories and much more – without ever needing to leave a customer’s side. They can even use the data at their fingertips to engage, inform and impress tech-savvy shoppers in new ways.
Knowing that consumers are ready to open their wallets is an encouraging sign, but success starts months before that. To succeed this season, retailers must embrace IT innovation and invest it wisely across their entire business, from online to the store floor.