Alonso Vargas, SVP of Product at Flybuy.
As the holiday season approaches, retailers are gearing up for one of the busiest and most lucrative times of the year. However, in a landscape impacted by inflation and evolving consumer preferences, the battleground for competition has shifted.
Today’s retail success is increasingly defined by the ability to deliver exceptional guest experiences across both digital and physical channels. This paradigm shift underscores the critical need for retailers to optimize their tech stacks, blending digital solutions with a seamless onramp into physical brick-and-mortar stores to meet the demands of modern consumers.
In 2022, total holiday retail sales grew by 7.6%, reaching $1.49 trillion, with e-commerce sales increasing by 7.9% to $252 billion. Retailers like Target thrived by leveraging omnichannel strategies like same-day delivery and curbside pickup, which helped drive an 18% growth in same-day services, with 95% of orders fulfilled from stores. This demonstrates the power of omnichannel integration to capture both in-store and online shoppers.
For 2023, holiday retail sales rose by 3.8%, reaching approximately $964.4 billion, with e-commerce sales continuing to serve by 10.3% to 12.8% (according to Deloitte), further reflecting the growing consumer preference for convenience and online shopping. Despite this, 85% of consumers expect to make at least one purchase in-store, highlighting the ongoing importance of brick-and-mortar experiences.
Click-and-collect services, bridging the gap between digital and physical shopping, accounted for 17% of holiday purchases. Best Buy also showcased the power of omnichannel strategies by effectively managing its holiday demand through buy-online-pickup-in-store (BOPIS). Retailers that embrace these approaches position themselves for continued success in an increasingly competitive holiday landscape.
Adapting To Inflation
The current economic environment, marked by rising inflation, has presented significant challenges for businesses across industries. Many retailers are grappling with increased costs, which has forced many to rethink their pricing strategies. However, simply competing on price is no longer enough to attract and retain customers.
The focus has shifted toward providing value beyond just cost savings. Retailers must focus on enhancing the overall customer experience, ensuring that digital storefronts are as personalized and seamless as their brick-and-mortar stores. This requires integrating online and offline channels to offer convenience and choice throughout the shopping journey.
The Importance Of Guest Experience
In the era of heightened consumer expectations, delivering a positive and memorable guest experience has become a key differentiator for retailers. This extends beyond the products themselves, encompassing every touchpoint of the customer journey. In a market dominated by digital giants like Amazon, retailers must prioritize the guest experience both online and in-store to remain competitive.
Convenience and personalization are now critical drivers of consumer loyalty. By offering seamless omnichannel experiences, personalized recommendations, efficient checkout processes and exceptional customer service, retailers can foster deeper connections with their customers.
Investing in enhancing the guest experience not only drives customer satisfaction and retention but also strengthens the retailer’s position in a crowded market where delivering value extends beyond just products and prices.
Optimizing Your Tech Stack For The Holidays
As retailers prepare for the holiday rush, optimizing your tech stack is essential to meet the demands of a digitally driven marketplace. Embracing a holistic approach that integrates digital solutions with physical store experiences can help retailers create a seamless and engaging shopping environment that resonates with today’s consumers. Here are key strategies to consider:
1. Elevating Your E-Commerce Platform
Enhance your online presence to cater to the growing number of consumers who prefer to shop online. Ensure that your e-commerce platform is user-friendly, mobile-responsive and equipped with features such as personalized recommendations and easy checkout processes.
Platforms like Shopify, BigCommerce and Adobe Commerce offer robust, user-friendly e-commerce solutions. These platforms are mobile-responsive and feature built-in tools for personalized product recommendations and streamlined checkout processes. For example, Shopify’s AI-powered tool, Shopify Magic, helps retailers deliver personalized experiences at scale.
2. Implementing Omnichannel Capabilities
Bridge the gap between online and offline channels by offering a unified shopping experience across all touchpoints. Enable options like buy online, pick up in-store and reserve online, purchase in-store to cater to diverse customer preferences.
Retailers can use Salesforce Commerce Cloud or Kibo for unified commerce platforms that enable seamless transitions between online and offline channels. Features like BOPIS are supported by solutions such as Oracle Retail and Shopify POS.
3. Enhancing Customer Engagement
Leverage data and analytics tools to gain insights into customer behavior and preferences. Use this information to tailor marketing campaigns, promotions and product offerings that resonate with your target audience.
Analytics platforms like Google Analytics 360 and Adobe Analytics help retailers gain deep insights into customer behavior. For more targeted marketing and personalization, companies like Dynamic Yield and Emarsys offer solutions that tailor customer experiences through real-time data.
4. Streamlining Operations With Automation
Implement automation solutions to optimize inventory management and ensure timely order fulfillment. By reducing manual tasks and increasing operational efficiency, retailers can deliver a smoother and more efficient shopping experience for customers. For example, Manhattan Associates offers advanced warehouse management systems that automate inventory tracking and fulfillment processes. Brightpearl provides retail management software that integrates with e-commerce platforms to automate order management and inventory control.
In a retail landscape shaped by inflation and evolving consumer expectations, the holiday season presents a critical opportunity for retailers to showcase their ability to adapt and thrive. By investing in a robust and integrated tech stack that combines digital innovation with physical store experiences, retailers can position themselves for success.
Delivering a superior guest experience that resonates with customers will be key to driving growth and building lasting relationships during this pivotal time. As we navigate the challenges and opportunities of the holiday season, staying agile, responsive and focused on enhancing the overall customer journey will be essential for success.
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