retail

Holiday season readiness: our recommended strategies for success

insight
November 15, 2024
9 min read

Amazon has revolutionized the way we shop and set the standard for convenience with fast delivery to our doorstep. As consumers, we have become accustomed to getting everything we need at the click of a button — and during the holiday season, the stakes are even higher. For many businesses, this period can make or break the entire year. The 2024 holiday season is fast approaching and the question isn't only how to keep up, but also how to thrive in this challenging environment. Let’s look at the key challenges you need to navigate to be successful this holiday season.

In December 2021, Amazon Web Services (AWS) experienced an outage that impacted several online retailers, including their payment processing. The outage lasted several hours and led to delays in transactions and significant frustration for customers. In November 2022, PayPal experienced a technical issue that disrupted transactions for nearly six hours and impacted thousands of businesses during peak shopping hours.

The impact of these outages is severe.

Holiday season ahead: what obstacles will you have to overcome this year?

The AI transformation is a holistic overhaul that is reshaping business processes and their value creation. Therefore, it requires a synchronized development of mindsets, capabilities, and tools to realize the full potential of AI and lead the future of work.

Price-conscious

Consumers are more price-conscious than ever, and economic trends suggest that price will have a big impact on where they shop this holiday season. While many will be looking for the lowest prices, a portion of shoppers will continue to prioritize quality in their decisions.

The rise of Chinese shopping apps such as Temu and Shein is creating additional competition as they offer low-cost alternatives that increase the pressure on retailers. Now more than ever, businesses need to find a balance between consumer expectations and competitive pricing. To stand out in this crowded market, clear differentiation is essential.

Balancing price and quality in a competitive market

Price sensitivity is a key factor in consumer behavior this holiday season. With increasing economic pressures, many shoppers will base their purchasing decisions primarily on price. However, part of the market will continue to prioritise quality in their choices.

Chinese shopping platforms such as Temu and Shein, which offer rock-bottom prices and further intensify competition, are exacerbating the competitive situation. Retailers now face the critical challenge of balancing consumer expectations with competitive pricing, while at the same time standing out in an increasingly crowded market. With the increasing popularity of low-price alternatives, the need for differentiation has never been more important.

The rise of apps

Mobile apps are the new normal, and we expect nothing less. Consumers are used to buying almost all goods via apps, and new and innovative technologies have made shopping behaviors easy and enjoyable. 3D views to see the product in your space are a great example of such innovations.

Features such as personalized recommendations, voice-activated searches and one-click purchasing have made mobile shopping a highly interactive experience. These are no longer premium features, but are seen by consumers as the bare minimum. As technology becomes more readily available, we should all expect a much more immersive shopping experience. Retailers, especially online retailers, have been at the forefront of technology adoption and we should continue to see them at the forefront of consumers' minds when it comes to retail and technology. You need to avoid falling into a trap that means you have to play catch-up.

Acceptance of AI

Now that Generative AI has become mainstream, customers expect it to be a part of every journey. Leading companies like Amazon have integrated conversational AI into their shopping experiences to make things exciting and raise consumer expectations. This also leads to engaging interactions with AI that can make fine-tuned suggestions. Customers expect enhanced and intuitive experiences in terms of customer support— this is now the new normal. This drives loyalty and leads customers to spend with the brand. The use of Generative AI technologies also positions the brand as innovative.

Shift towards experiences and services

In cases where several retailers sell the same products, experience and service become important differentiators. For example, many retailers sell an Apple iPhone, but for customers it’s about who is trustworthy, who offers the best services, and the buying experience. This means that some retailers in a crowded market need to create special customer experiences. This is especially true for local retailers who do not have a global and digital reach like some international marketplaces. Personalized assistance, comprehensive support and services that lead to a smooth buying process can make the difference in attracting customers.

Get set!

If you want to have a great holiday season, you need to understand the shift to experiences and services, the dynamics of consumer spending, the role of discounts and promotions in achieving the right price point, and the need for a seamless omnichannel strategy to succeed. Ultimately, it's important for retailers to understand and respond to these market dynamics in order to attract and retain customers this holiday season. Building strong relationships and delivering value beyond the product is a sure-fire way to foster customer loyalty and create a unique selling proposition.

Holiday season preparedness: our recommended strategies for success

Deliver personalized experiences across channels

Personalization has been a standard for over a decade and customers now expect it to be seamless across all platforms. An effective omnichannel personalization strategy is essential for success, whether on social media, email, web browsing, mobile apps or in-store. Consumers expect brands to recognize their needs and deliver personalized recommendations immediately— waiting weeks for data analysis is no longer acceptable. To fulfil these rising expectations, retailers need to invest in real-time data capabilities and adopt AI-driven architectures.

For instance

If customers frequently purchase eco- friendly products, personalized recommendations that highlight sustainable options can improve their shopping experience. This personalization needs to be subtle when we collect the information. However, if we determine that the customer profile is eco-friendly, we can start to update the products in the search results and highlight them with a badge/icon.

Action plan

Equip your in-store staff with actionable customer information to enable personalized in-store advice. This ensures a seamless transition from the online to offline experience and creates a unified, cohesive journey for the customer. Through customized interactions at every touchpoint, you not only increase customer satisfaction, but also build lasting loyalty— that leads to repeat purchases and valuable referrals.

Lean into social commerce

Social media is pivotal to many retailers in the current digital ecosystem. For some retailers, it is the only channel they use to drive revenue; for others, it plays an important complementary role to their eCommerce channels. Social commerce is crucial as social media platforms have evolved into powerful retail channels. They catalyze consumers to discover and buy products while following their favorite influencers. As a retailer, you need robust ways to integrate your product catalogues with platforms like Instagram, Facebook and TikTok and enable features like shoppable posts and in-app purchases. It’s vital that your content and experience strategy crosses over to social media channels and that the brand tone remains consistent across all channels.

For instance

Engaging content is vital to capturing attention on the social media. Influencers can amplify reach and boost your brand's credibility. Your ability to curate user-generated content on your web channel and mobile apps is also crucial. You need to create campaigns that encourage customers to share their experiences, create authentic connections and foster community. Behind-the-scenes segments, interactive stories and live streaming events are all different methods that need to be part of your overall content and experience strategy.

Action plan

Integrate social interactions into your platforms to amplify customer engagement. Rewarding users for sharing comments and offering expert advice can significantly influence buying decisions. Social media channels are invaluable sources of data on customer behavior; using this information allows you to craft compelling, data-driven campaigns across all touchpoints. When implemented effectively, this strategy creates a seamless shopping experience that becomes an integral part of your customers' daily routine, making every interaction more engaging and meaningful.

Use gamified engagement tactics

Gamification is a tactic that many retailers use to create shopping experiences that motivate customers to take action. Retailers should look to implement gamification tactics such as challenges, reward programs, and interactive features on digital channels. The same can be extended to offline channels like stores, too. Most retailers have already developed a points system dedicated to transactional loyalty only. Many retailers have loyalty programs that reward points for non-transactional applications such as social shares, referrals, etc. For most retailers, a largely untapped opportunity is to think about how they can create missions (small steps) that can support the customer during their buying journey. Such missions increase conversion rates and help with abandonment rates.

For instance

Gamified engagement can involve running interactive contests, such as spin-to-win promotions, across online and offline channels. Retailers can offer a variety of engaging activities such as virtual scavenger hunts or quizzes that are tailored to customers' gamified profiles. By personalizing these experiences based on individual preferences and behaviors, you can create fun, competitive elements that drive engagement and build brand loyalty.

Action plan

Data on customer behavior is the key to finding out which games and missions will appeal to certain target groups. Identifying the right target audience is critical because not all customers are interested in gamified engagement. However, for those who are, this approach can be very effective. Tailoring gamification experiences to the right customers ensures a personalized and impactful strategy that boosts engagement and brand loyalty.

Conclusion

"In a marketplace overflowing with choices, it's the unique and meaningful experiences you create that will set your brand apart—prioritizing innovation in customer engagement today will define the success stories of tomorrow."

As the 2024 holiday season approaches, retailers are navigating a landscape where price-conscious consumers still expect top-tier quality. The surge of low-cost competitors and the rapid integration of Generative AI are pushing customer expectations even higher. In a crowded market where product offerings blur together, delivering exceptional customer experiences has become the key differentiator. To thrive, retailers must embrace social commerce, leverage gamified engagement, and foster deeper relationships that offer value beyond the product. Those who prioritize innovative customer engagement will not only stand out but will also define success in the ever-evolving retail environment.

Are you ready to elevate your customer experience and lead the way in this evolving landscape? Let’s connect and explore how we can transform your brand together!

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Holiday season readiness: our recommended strategies for success