Supply issues. High employee turnover. The highest inflation in four decades. Unsold summer stock. Just before the start of the 2022 holiday shopping season when businesses earn as much as 30% of their annual sales, retailers are on uncertain ground. This shopping season will be the first in years that happens during a bear economy or when a market experiences prolonged price declines.
Despite that, the National Retail Federation (NRF) forecasts retailers can increase sales this year by between 6% and 8% over last year if they focus on key marketplace strategies including making e-commerce simple, delivering products and services faster, offering incentives, improving cybersecurity, and stepping up customer service. In a nutshell, the key to making money this holiday season is making everything convenient and worthwhile for customers like never before.
The prediction comes with a big caveat.
Retailers must make changes now because customers, who normally wait until Halloween, have already started their holiday shopping.
One reason for the early shopping is that right now they can get major savings from stores trying to get rid of inventory to make way for holiday goods. Consumers want those deals today while they are happening.
A second reason is shipping supply issues and inventory. Research by McKinsey & Company shows 51% of consumers are concerned about inventory and slow shipping times this holiday. Businesses need to ensure customers there is plenty of stock, or if there is low inventory, clearly communicate about possible delays so that consumers can make alternate plans. Retailers should also make the time today to streamline their pick, pack and ship procedures.
A third reason consumers are already holiday shopping is financial insecurity. According to a March 2022 survey by the University of Michigan, 32% of consumers expect their financial position to worsen in the year ahead. The university says that’s the highest percentage recorded since it started the survey in the mid-1940s.
The survey also found nearly half of consumers worry about inflation and are planning to reduce their holiday spending. All of that adds up to a season where shoppers will be careful how and where they shop and make every dollar count.
If retailers don’t bend over backward for budget-conscious customers in stores and online, they’ll go elsewhere to spend their precious dollars.
Here are four tips to help retailers make more money than last year and have a happy holiday:
- SIMPLICITY. Keep it simple. Make shopping an easy, fun experience online and in person. That means making it easy to navigate and find items along with a seamless path to checkout.
Ensure customers can easily shop on their phones and tablets, since three out of every four dollars spent online in 2022 is made with a mobile device.
Keep the choices limited. If you’ve ever been to a restaurant with 10 pages of dinner options, you’ll understand the feeling of being overwhelmed by too many items to consider.
To make it easy to find holiday items, showcase them.
Decide which products you’ll sell this holiday and bundle items for the best pricing. You can showcase holiday items on your homepage or create a special section in your navigation for those items.
Most importantly, prepare by auditing your inventory and presenting good prices and descriptions of products. If you can, enable a ‘compare products’ feature, so that shoppers can determine the best value.
Experts also recommend a succinct menu, an easy-to-find search bar and top-selling items at the top of the homepage. The bottom line is if they can’t find what they’re looking for easily on your website, they’ll find it somewhere else.
Finally, the checkout process is critical. One survey says that 21% of U.S. shoppers leave their shopping carts because of a long, complicated checkout process.
Optimize the process by putting all of the check-out forms on one page. If people using phones have to wait for multiple pages to load, studies show they are likely to abandon their cart.
A full 35% of shoppers abandon a purchase when checkout is too difficult, according to reviews.
Don’t require people to create an account. Instead, offer guest checkout for first-time customers who may not trust your business yet. Also, give customers several easy payment options like PayPal, Apple and Google Pay, Venmo and credit cards. Also offer flexible payment option like Buy Now, Pay Later (BNPL) and Pay over time. Customers used those payment methods 20% more in 2021 than in 2020. Retailers saw the benefits too. One business said the average order value increased by 50% after implementing BNPL. Experts predict the BNPL payment in the U.S. will grow by 66.5% by the end of 2020.
For ultimate convenience, let shoppers send items to different addresses with different shipping options.
Consider gift cards to upsell at checkout and special holiday offers like free-gift wrapping. With porch pirate theft on the rise, tracking information is also critical to many shoppers who want to follow the order from the moment its ordered to their door.
- INCENTIVES. Make it worth their while. Customer incentives can drive customer loyalty. Conversely, when you don’t treat repeat customers as special, you can lose their business. Here are the facts that drive those conclusions:
- 75% of customers favor companies that offer rewards.
- More than half of U.S. consumers have left a brand they were loyal to for a competitor that better met their needs.
- 48% of people expect specialized treatment for being a good customer.
If you’ve ever received a coupon in the mail for your favorite restaurant that you frequent, only to notice in the fine print that it just applies to new customers, then you know how it feels. It’s as if the business only values new customers when it should be courting its existing customers. After all, 65% of existing customers make up a company’s business and statistics show they are willing to share their positive experiences with 11 other people.
When you send promotion emails, clearly state you’re recognizing long-term customers for their loyalty. New studies show young people care most about special treatment. According to the Connected Shoppers Report, Millennials and Gen Zers value exclusive access to limited products and experiences nearly two times more than Gen X and Baby Boomers. According to the report, loyalty is the new brand differentiator.
In an economy where every dollar matters for some consumers, they are more likely going to buy the same-priced item you’re selling on a website or store where they get a reward, loyalty discount or cash back. A good loyalty program is easy to use with a phone number or email instead of an account number and have membership-only benefits. Putting expiration dates on the rewards will ensure they return to the store quickly to cash in on the rewards.
Customers can also be incentivized by shopping at businesses that donate to particular causes and/or that have committed to sustainability and are environmentally conscious. In fact, 78% of customers say environmental practices influence their decision to buy from a company.
If you recycle, re-use or have reduced your packaging as Amazon just did, highlight your efforts to entice customers to shop with you.
You can also offer members early access to shopping, free expedited shipping, and exclusive events and products.
- SERVICE. Make it an experience. From the moment your customer lands on your website, they should be enticed by engaging pictures and content. Use explainer videos to show how easy products and services work, and graphics that offer step-by-step instructions. Also, have someone available to answer questions via chat, chatbots with the option to be transferred to live support and phone numbers to reach customer service representatives during store hours.
Customers are wise about fraudulent sites and will often turn away from businesses without contact information listed clearly on their websites.
Ensure your representatives are in the loop about inventory, shipping timelines, backorders and delays. Offer instant text or email messaging about their order status.
Include a page about frequently asked questions to reduce calls to service centers and make it easier for customers to find answers to common questions. Update the page with holiday-specific information like new store hours and returns. A study found 76% of service agents think the phone is the preferred method of communication to talk about complicated questions and complaints.
If customers have a poor online shopping experience, 44% will never return, and 12% will leave a bad online review. Since more than half of all shoppers read reviews before making a purchase decision, that will radically impact sales in the long run.
If you don’t already, implement the popular BOPIS or Buy Online, Pick Up in Store. With BIPOS, customers don’t have to wait in line to check out and your order is often ready within the hour. During the pandemic, BOPIC grew 107%. Forecasts indicate it will continue to grow every year by at least 15%. One study by Raydiant State last year found 60% of consumers plan to keep using it the same amount or more often within the next year. Retailers love it because they save on shipping costs. In fact, 74% of retailers report shoppers bought at least one more product while in the store to pick up the purchase.
You can also offer consumers a good shopping experience by offering tap-and-go payments with credit cards.
Also, make the return experience easy and convenient by allowing online customers to drop off returns in-store and offering contactless return kiosks like they have Kohl’s stores. Prominently display your return policy and include instructions about how gift recipients can reuse original shipping and packaging for returns. Remember to be a little more flexible during the holidays when so many purchases are gifts. Whatever your policy is, make sure it is transparent and fair.
The numbers are startling about the importance of online returns. More than 60% of shoppers would continue shopping at a store after a good return experience, while 65% would stop buying after a poor experience, according to the NRF.
Protect your company and customers from theft, fraud and data breaches.
- SECURITY. Make it safe for shoppers. Just like consumers, criminals love the holidays and take advantage of busy, distracted shoppers and fatigued retailers. That’s why retailers should put as much effort into cybersecurity as any other shopping enhancement. While you may guess most attacks come from outsiders, a Forbes investigation found 95% of all cybercrime and security breaches are due to human error. That means people are getting into business networks from employee mistakes. It’s already a $6 trillion a year global problem.
By the year 2025, experts expert cybercrime damages will reach $10.5 trillion a year.
The best way to protect your company and your customers from theft, fraud and data breaches is with software like Clever Division by Red Maple. The security product safeguards customer credit card numbers simply by not storing them. Instead, Clever Division uses two-factor authentication to collect and confirm the information without ever writing the entire credit card number into a database.
Clever Division stops employee theft because workers cannot see customers’ account numbers. It also takes away the reason bad actors want to hack a business, because if there is a breach, scammers will only find scrambled, incomplete, and unusable information. While experts say ransomware attacks increased 600% globally in the last two years, your business won’t be a target with Clever Division. With the software, businesses will never need to store personal information again, leaving the cybercriminals nothing to take and hold hostage. Unfortunately, a survey last year shows 83% of organizations hit by a ransomware attack gave in to attackers’ demands and lost millions.
Other attacks hit shoppers directly in their email.
- Consumers will receive phishing emails that try to trick consumers into giving up login credentials.
- They’ll then try those credentials on hundreds of other websites, called credential stuffing, hoping the person uses the same username and password for multiple accounts.
- This is when criminals create realistic looking, but ultimately fraudulent websites.
- They lure customers into revealing their credit card information.
While retailers can’t prevent phishing, credential stuffing, and brand spoofing, they can protect customers every single time they interact with the business. Multiple studies show cybersecurity plays a big role in building customer confidence and having a better customer experience.
Likewise, other studies show consumers have stopped buying and using services because of privacy concerns. Using recognized cybersecurity software will not only safeguard your customers, it will also protect your reputation and bottom line during a shopping season when you may be fighting to earn and keep every dollar.
With high inflation, what can retailers do this holiday season to make a profit?
The key to businesses making money this holiday season is making everything convenient and worthwhile for customers like never before. The National Retail Federation (NRF) forecasts retailers can increase sales this year by between 6% and 8% over last year if they focus on key marketplace strategies including making e-commerce simple, delivering products and services faster, offering incentives, improving cybersecurity with products like Clever Division, and stepping up customer service.
How do I protect my business from cyberattacks, ransomware, breaches and hacks?
Experts say cybercrime is now a $6 trillion problem. They predict 33 billion accounts will be breached in 2023, yet 70% of small businesses are completely unprepared for a cyberattack. Ransomware or a breach can ruin a business’ reputation and even shut it down. Red Maple’s Clever Division software is the most secure PCI platform on the market today. Clever Division safeguards your customers’ credit card numbers by dividing them, locking them in separate vaults and replacing them with an encrypted token from your processor.
How can I create a good shopping experience for my customers?
Make everything seamless and easy for customers to make a purchase, especially on mobile devices. A full 35% of shoppers abandon a purchase when checkout is too difficult, according to reviews. If customers have a poor online shopping experience, 44% will never return, and 12% will leave a bad online review. Since more than half of all shoppers read reviews before making a purchase decision, that will radically impact sales in the long run. With everything from gasoline to milk costing more, consumers today want to make every dollar count. So, give them a great e-commerce shopping experience by highlighting sales and clearance items. Communicate clearly about shipping delays and low inventory. Make sure your contact information is clearly posted so they can call with questions. Create how-to videos where needed. Also, make it’s easy and convenient for shoppers to make returns or statistics show they won’t purchase from your business again.