For most retailers, the 2018 holiday shopping season will present their biggest opportunity of the year to engage with customers. It will also represent the bulk of their annual sales.
As a result, this time of year is crucial for retailers to achieve success. With that in mind, current conditions make this holiday shopping season look positive for retailers.
Here are five things that retailers need to keep in mind before heading into the holidays.
1. Consumers Are Upbeat About Spending
From what we’ve seen, customers are excited about shopping this year.
Brick-and-mortar sales will grow 1.4 percent and online growth is expected to reach 14 percent, according to Forrester Analytics: Online Holiday Retail Sales Forecast, 2018 (U.S.). Various studies also show that the average U.S. consumer will spend more during the upcoming holiday season, jumping from $1,226 per consumer to $1,536.
Deloitte’s annual holiday economic forecast looks great for retailers as well. Consumers seem confident about the economy, their household financial situations, and their spending plans for the upcoming holiday season.
Deloitte’s consumer survey shows online spending continues to grow and is expected to account for 57 percent of all purchases. Also, Deloitte’s research notes that shoppers are enthusiastic about the holiday season and remain price- and value-focused.
Based on the report, retailers are in a good spot to influence where consumers shop this year as many shoppers are entering the season undecided.
2. Thanksgiving is Coming Early
Consumers are doing their holiday shopping earlier based on a study by Bazaarvoice. An early Thanksgiving helps spread the holiday shopping theme to consumers.
Thanksgiving is as early as it can be this year (Nov. 22) which could prove helpful to retailers. Sixty percent of consumers say they begin their holiday shopping before Thanksgiving . This is particularly important this year because there will be 33 days between Thanksgiving and Christmas.
Retailers have that much more time to fully engage consumers this holiday season. Although spending will increase this holiday season, retailers must be conscientious when it comes to identifying their best customers who are most likely to spend the most.
It appears that consumers look forward to spending early for their holiday shopping . This fact, combined with the Thanksgiving retail shopping period that includes Black Friday and Cyber Monday, means brands need to be prepared for this critical holiday shopping period around Thanksgiving.
3. The Strong Economy Will Help Retailers
Consumers are confident about the economy for several reasons. National Retail Federation President and CEO Matthew Shay cited some of these factors .
“Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we’ve seen over the past year,” Shay noted.
Holiday sales in 2017 totaled $687.87 billion, a 5.3 percent increase over 2016 and the largest increase since the 5.2 percent year-over-year gain seen in 2010 after the end of the Great Recession.
“Last year’s strong results were thanks to growing wages, stronger employment, and higher confidence, complemented by anticipation of tax cuts that led consumers to spend more than expected,” NRF Chief Economist Jack Kleinhenz said. “With this year’s forecast, we continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy. The combination of increased job creation, improved wages, tamed inflation and an increase in net worth all provide the capacity and the confidence to spend.”
All of these strong macroeconomic factors have contributed to one of the best consumer discretionary spending environments in years .
Consumer confidence in the economy is a powerful thing during the holiday season, which places retailers in an ideal situation to enhance engagement and retention levels.
4. Retailers Can Make the Holiday Season a Memorable One
Retailers can take advantage of the favorable economy and positive consumer sentiment through customer insights data during the holiday season.
Preparation for the holiday season is imperative for retailers. One under-the-radar element of holiday preparation for retailers should be website performance.
Whether it is a brick-and-mortar store or an ecommerce site, online presence marks the essence of every business strategy today. Checking website performance, load time, application performance testing, application load test, and much more are quickly becoming inevitable for commercial success.
All these factors play a vital role, especially during the high-pressure holiday season when every small or big portal is trying to grab maximum profits from the market.
During the holiday season retailers need to ensure that store associates are well versed and excited about the loyalty programs they will be promoting.
5. Customer Engagement Shouldn’t End with the 2018 Holiday Shopping Season
The holiday season is a great time to engage and create new customers, but what happens after that? One of the strategies a retailer can use to achieve this goal is a loyalty program.
There are thousands of loyalty programs out there, but consumers are drawn to ones that are simple and offer real value.
A new study shows that 40 percent of customers who refrain from signing up for loyalty programs do so because the value of being a loyalty member is not worth the time, money, or effort of signing up. And for those who sign up, 76 percent do so to qualify for special promotions.
Retailers should take note of these statistics and evaluate special offers for loyalty members to ensure that their promotions are competitive and offer value.
Effectively leveraging a loyalty program during the holiday season can go a long way toward retaining customers in the long run. That customer engagement during the holiday season should continue in the New Year to bolster your consumer relationships.
Loyalty program signup is important throughout the year, but it takes on added importance and relevance during the holiday season.
Happy Holiday Shopping Season
If brands listen to their customers, identify their pain points, and meet their expectations, they can build solid two-way relationships that extend well beyond the holiday season.
Given the fact that consumers are upbeat about spending in a strong and vibrant economy, retailers can and should take advantage of the early Thanksgiving and make this holiday season a memorable one through increased customer engagement, more promotions around value-driven loyalty programs, and ensuring that store associates are proficient in your key brand messaging.
Creating memorable moments is a huge part of the holiday season.
Focus on your customers and enjoy a Happy Holiday Shopping Season!