Retail has been one of the most heavily impacted industries by COVID-19; it’s forced businesses to take a step back and adjust how to service shoppers and safely conduct day-to-day operations, so it makes sense the industry’s most important time of year – the holiday shopping season – would epitomize the demands, challenges, and trends shaping the retail landscape today as part of society’s ‘new normal.’
With this in mind, let’s explore four factors that will shape this year’s holiday shopping season – and beyond!
Re-defining the ‘Holiday Shopping Season’
The pandemic is accelerating existing retail trends that had already emerged and were growing. At a macro level, this is changing how consumers and retailers traditionally define the holiday shopping season – when it actually occurs on the calendar, primary shopping channels, and more. A recent survey of US consumers by AlixPartners supports these theories: 50% of survey respondents stating they plan to begin holiday shopping before Halloween this year, an increase of nearly 10% from last year, indicating the November-December shopping surge retailers prepare for every year may be fading away permanently.
A large percentage of shoppers continue to be apprehensive about entering physical brick and mortar stores, but the sustained growth (and the convenience) of ecommerce shopper platforms only enables online shopping. It shouldn’t be surprising that 45% of survey respondents plan to conduct the majority of their holiday shopping online. These changing shopping preferences and behaviors will require retailers to reevaluate where to focus their efforts and will likely deemphasize major in-store shopping dates like Black Friday, this season and moving forward.
Ecommerce Growth and Importance of Retail’s Supply Chain
As we cited above, ecommerce is more popular than ever. The holiday shopping season represents an exaggerated sample of this trend, with some experts predicting ecommerce sales to see a record growth of almost 40% for November-December. The reason is multi-faceted: the existing trajectory of online sales, pandemic-accelerated buying habits, and notable retail brands offering compelling online promotions during the season (such as Amazon moving Prime Day from July to October). As a result, businesses are closing and/or reconfiguring expensive brick and mortar locations to increase focus on their online presence, which of course only increases the emphasis on and adoption of ecommerce.
All of these factors place immense pressure on retail’s critical business operations and functions that need to support the spike in online spending. Retailers must ensure their supply chains, as well as fulfillment and distribution centers, are equipped to handle the increased traffic and demand. Further complicating this dynamic further, there seems to be a shortage in certain goods ahead of the shopping season, as suppliers/retailers misjudged (or underestimated) consumer buying behaviors. To combat these challenges, retail and logistics organizations are investing in strategic technologies, specifically reliable IT network solutions, to digitize their supply chain.
Extended and Elevated Services for Brick & Mortar Stores
Despite the continued growth ecommerce has experienced, reports suggest that two thirds of retail sales this holiday shopping season will still be driven by brick and mortar stores. That said, retailers who hope to see these sales figures come to fruition need to adapt to the increased challenges and demands facing physical retail today; namely, providing elevated and extended services that maintain shopper safety, provide convenience, and deliver more value. To remain operational during the pandemic, many retail businesses have already instituted these services for their shoppers. It’s safe to assume retail brands will double down on flexible shopping options entering the holiday shopping season, such as in-store pickup, curbside payment/pickup, outdoor marketplaces, and pop-up retail sites.
While extended services undoubtedly help support sales and accommodate shoppers, they are also require adaptable, flexible, secure technologies to be effective – especially with the influx of shopper activity during the holidays. For curbside pickup and pop-up sites, retailers need to cover outdoor environments with secure connectivity for device support and payment processing. Buy-online-pick-up-in-store (BOPIS) services are increasingly popular, however both BOPIS and ship-from-store rely on IoT devices such as scanners, tablets, and mobile phones to accurately keep track of inventory on the floor and in the backrooms of physical stores.
Data-Driven Insights and Analytics
We previously described four technology trends shaping the ‘new norm’ in retail, including curbside pickup, electronic shelf-labeling, and more; this holiday shopping season and beyond, digital transformation and the systems enabling it will only increase as a cornerstone of a successful, profitable retail business. The dynamic and unpredictable nature of the industry (not to mention society as a whole) today underscores the advantage of capturing the right information to make data-driven, knowledgeable decisions.
Retailers must harness the ability to access valuable insights and actionable analytics from various environments. Without that information, they are essentially taking shots in the dark in an uncertain, post-pandemic world where businesses are in unchartered waters. Data generated from cloud-driven IT network solutions can help retailers better understand consumer needs, capitalize on digital commerce, and track customer shopping patterns over time. It’s never been more important to make use of data to drive customer loyalty, trust, engagement, and safety beyond the pandemic. A retailer’s data also shouldn’t have an expiration date; with unlimited data, a retail business can compare trends pre and post-pandemic- especially helpful for critical timeframes like the holiday shopping season.
To read more about the latest trends in retail, and to explore how cloud-driven network solutions meet the industry’s evolving need, check out the resources below: