The holiday season has just recently passed, and for retailers it’s a time of reflection. Which strategies worked? What lessons were learned? What can be used not just next holiday season, but throughout the calendar year. On Tuesday at NRF 2015, a panel of retail experts gathered to discuss how the recent holiday season went, and what they learned from it:
Different Goals, Different Strategies
Companies have different strategies heading into the busy holiday season depending on their size, customer base, whether they’re online-only or a brick and mortar, etc. Kacey Sharrett, VP Omnichannel for Toys R Us, shed light on the company’s hopes of cutting down on long lines and making the in-store experience faster and easier. Co-founder, President, and CEO Jack Kiefer of BabyAge.com said that as a small eCommerce site, they tend to treat the holidays as an experimental time. And while pet food isn’t generally a hot item during holiday time, online pet food delivery company PetFlow hoped to bring people in before big Cyber Monday deals and lock them in as future customers, said President and COO Michael Lackman. For retailers, the holidays can represent a different opportunity, but goals should be unique and based on business objectives.
The Promise Balance
With so many people shopping online for the holidays, companies have had to make tough judgments as to when they can guarantee delivery. Operational constraints must be taken into consideration so that retailers can deliver on their promises to the customer. “It’s rare that you get credit for being a hero; it’s more often that an epic failure gets talked about when you screw up holiday deliveries,” said Kiefer. Sharrett noted that Toys R Us was able to guarantee shipping up until Dec. 23, because the company ships from its stores. The deadlines will differ across companies, but the important thing is to be clear about this with your customers so to avoid those “epic failures”. This is an area that will be under further scrutiny in the future as same-day delivery and “buy online, pickup in-store” becomes more prevalent.
Same-day delivery, delivery within the hour…what is the implication for retailers? Toys R Us has been doing same-day delivery for nearly three years through Google, but Sharrett cautioned that this is not right for every business. Not all customers are going to expect it, and not every brand needs to promise it. And while it does indeed make sense for some retailers to go ahead and try rapid deliver services, it is nonetheless very challenging and and complicated, both financially and logistically. Before making the decision to go forward with it, Sharrett added, you must really know your market and really know your business.
Competing With the Amazons
It can be frustrating when a product that you sell in your stores shows up on Amazon for a cheaper price than you’ve advertised or can afford to sell for. Kiefer said that this has caused BabyAge.com to just become more selective with its brands, while PetFlow locked prices in weeks ahead of time and worked with its existing consumer base to pull revenue into November. For Toys R Us, they placed a heavy focus on inventory, banking on the sense of accomplishment and delight that customers feel when they can cross an item off the holiday list in the waning days before the deadline.
The Great Return Game
Sharrett noted a Forrester study, that indicated that nearly 50% of customers had the process for returns in their mind while making a purchase. Toys R Us makes sure that its in-store associates are aware that those customers who purchase online but return in store are, indeed, still customers and should be treated as so. And while offering free returns would be perfect in the eyes of any customer, it’s also not realistic for every company. Lackman said: “It’s important to understand that you can’t do everything awesome at once.”
The implications for mobile differ depending on the business model. For a big store like Toys R Us, it’s crucial that the in-store associates are well-trained with how to engage customers who have previously shopped online, or are on their mobile device in the store. These customers already likely know what the price of a product is, so this has changed the traditional paradigm for team members. PetFlow is able to utilize mobile to take advantage when other competing stores are out of stock of a particular item. A mobile site has allowed customers, while in another store, to see if PetFlow has a particular item, and Lackman said this has helped drive sales.