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Stayin’ Alive: 5 Retail Survival Strategies for Holiday 2017

Selena Ricks-Good
Posted by: Selena Ricks-Good on Aug 1, 2017 12:30:00 PM
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Recent headlines are casting an apocalyptic scene for brick-and-mortar retail. Empty storefronts, vacant big-box lots, and bankrupt brands are on the rise, while unemployment drops and consumer confidence is high—signaling a sea change in consumer preferences. While the dynamics of the industry are shifting dramatically, physical retail is not going away anytime soon as it still accounts for 90% of total retail sales. As retailers head into the busiest time of the year, how can they grapple with the rising tide of challenges?To survive in this pressure-cooker environment and be ready for the 2017 holiday season, retailers need to have a clear understanding of the factors driving the industry disruption, and take action beyond offering deep discounts. While there is no silver bullet to the threat of e-commerce rivals, here are some practical tactics for making the most of holiday 2017:

Customer Experience Above All

In this age of convenience via doorstep delivery, why do shoppers make a trip to a physical store at all? Simple — instant gratification and a human shopping experience. These are brick-and-mortar’s core competitive advantages over e-commerce.

A recent study by retail tech firm Interactions found shoppers are influenced by a mix of digital and human engagement—84 percent expect retailers to successfully implement technology to improve the shopping experience, and 62 percent are motivated by an initial human greeting upon entering the store.

More and more chains are adding value-added services, like custom-fitted golf clubs and running sneakers at Dick’s Sporting Goods, DIY classes at Home Depot, in-store yoga classes at Lululemon and Athleta, coworking stations at select Staples locations, or Best Buy’s in-home consultations to set up smart home devices (expected to be the hottest items of holiday 2017, by the way).

Shopping as entertainment is also a trend that large retailers are trying in hopes of giving people a reason to visit their stores. Malls are hosting amusement parks, art installations, food pop-ups, outdoor concerts, and other family-friendly activities to engage customers, foster culture, and build loyalty. But get the customer experience wrong — inadequate parking, poor product selection, long wait times, rude employees — and consumers will take their business elsewhere.

Personalization & Loyalty Programs

Creating positive emotions can result in lasting connections between brands and consumers. When brand representatives make loyalty program members feel special or recognized, it results in 2.7 times increased satisfaction and loyalty to the brand, according to the Bond Brand Loyalty Report.

Getting to know customers is key to meeting their needs and capturing their interests. Whether retailers choose mobile app loyalty programs, email, e-commerce tracking, connected devices such as beacons to measure foot traffic, in-store POS, or an omni-channel combination of data-gathering technologies, retailers need tools to optimize customer data.

As an example, Starbucks’ app bundles loyalty and conveniences like Order & Pay, garnering approximately 19 million monthly active users. The app uses an artificial intelligence (AI) algorithm based on consumers’ preferences and behavior to predict, personalize, and recommend individual offerings at checkout. The app has been so successful that Starbucks’ mobile app sales account for nearly 30% of total sales at rush hour, with the order ahead feature actually increasing wait times for regular customers.

Urgency In-Store

Location-based marketing strategies, enabled by geofencing, Bluetooth beacons, and other Internet of Things (IoT) devices such as digital signage, are allowing retailers to reach customers with the right messages at the right times. Interactions’ survey found that nearly 60 percent of consumers spend more money at stores that send phone notifications while they shop.

Kroger, the largest supermarket chain in the U.S. and a Mission Data client, has implemented several IoT solutions to improve the in-store customer journey. One solution is EDGE shelving, where shelves feature digital displays that present pricing information, videos about the products, and other information. Deployed at select stores, the technology can alert customers as they approach a store shelf about products on their shopping list and offer them immediate discounts.

A number of stores such as global fashion retailer Zara are using radio frequency identification (RFID) tags built into their security tags to alert sales associates of which items are being pulled off shelves and racks, tried on in fitting rooms, and sold on premise. Some retailers are integrating the century-old technology with touchscreens throughout the store or in fitting rooms that provide product information, outfit suggestions, and even opportunities to buy online.

Intelligent Inventory Management

As the holiday season gets closer, retailers are staring into their crystal balls to predict which items will resonate most with customers to avoid the dreaded unsold inventory at the end of the season. Those that have optimized their supply chains with advanced tracking and monitoring  systems can leverage historical and real-time data to maximize sales.

Back to the Zara example, as each item is sold, data from its RFID chip prompts an instant order to the stockroom requesting a replacement, making Zara’s supply chain more responsive to store stock levels and avoiding stock deficiencies, which can disappoint customers and discourage sales.

And with Kroger’s EDGE IoT shelving, the grocery chain can instantly monitor sales performance and inventory and tell store employees via a mobile app which SKUs should be on the shelves and where they should be presented.

These technologies tackle one of the largest sources of customer frustration: items being out of stock. Having access to real-time updates helps staff to provide better customer service by giving them the ability to answer stock queries more effectively.

Optimized Workforce

Retailers struggle with a competitive labor market—especially during the holidays. Stores may need to adjust back office and customer-facing roles as they see online sales surge in November, while December brings increased foot traffic to physical stores.

As Amazon prepares to hire 50,000 employees for its fulfillment centers in advance of the holiday season, a number of retailers won’t have the opportunity to go on hiring sprees—they’re sizing down. A retailer’s workforce is its most controllable expense and most strategic asset. A number of optimization tools can help provide managers with real-time visibility and control. Leading companies are integrating workforce management solutions with mobile platforms that unify scheduling, communication, and task and performance management.

Whether new hires are placed in fulfillment centers, customer service, or on the sales floor, ensuring seasonal hires are trained to understand the brand mission is key to the company meeting those promises. According to a Forrester survey, almost half of retailers saw improving the product knowledge of store staff is the number one driver for improving in-store experience.  However, associates can be less informed than customers who have done preliminary research online. Mobile solutions such as employee apps pre-loaded with product or inventory information can help empower employees to save the sale in the nick of time.

Conclusion

Nearly half of retailers’ revenue is captured during the holiday window, so you absolutely can’t afford to get it wrong this year. If your company is considering digital tools to transform your workforce, but you’re not sure where to begin, download our helpful whitepaper, “The Digital Roadmap to a Frictionless Distributed Workforce.”

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Topics: Strategy, Retail

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