To kick off our 4 questions on the 4 o’clock hour blog series, we asked our latest webinar panelist and retail marketing industry leader, Ira Hernowitz, to answer four questions that we feel have a significant impact on, shoppers, brands and retailers during the post-holiday shopping season. Who better to grace us with their expertise than a man who’s been in business for more than 25 years now! Here’s Ira’s take on how brick-and-mortar businesses can excel in not only the last few weeks of the year but, year-round.
Question #1: How can brands and retailers capitalize on both brick-and-mortar and ecommerce shoppers during the post-holiday timeframe and what should they do to bridge the two experiences together?
Answer: Statistics show 94% of retail sales are still generated in brick-and-mortar stores. But at the same time, online commerce continues to grow at a great rate, and mobile commerce is growing even faster. These statistics speak to this incredible convergence we’re seeing where ecommerce starts and ends and where brick-and-mortar begins. They are really becoming quite seamless. With that in mind, 55% of online shoppers would prefer to buy from a merchant with a physical store over an online-only retailer and 64% of people think that customer experience is more important than price in their choice of brand. These two statistics illustrate the burden that brick-and-mortar retailers now have to create not only an inviting shopping environment, but an overall great experience for shoppers. Retailers cannot take shoppers for granted in any way. When they are in in the store, retailers must communicate with them in the most powerful way possible and take advantage of the fact that they are in a completely different world than they were in the past.
Question #2: How has the retail business changed over the last few years and what are the opportunities?
Answer: Today we live in what I like to call “real time retail.” For example, in the old school retail world, most retailers were focused on getting into the new season immediately after Christmas. Now they need to think of the week following Christmas as an extension of the holiday season as there is more shopper opportunity than ever before. The biggest factor driving this has been the massive growth in gift cards, which now accounts for billions of dollars in shopper purchases immediately following Christmas. Retailers want to maximize their opportunity with those shoppers who are, as I like to think of it, burning holes in their pockets with gift cards. Secondly, in the time frame of the holidays, the most powerful word for marketing is “new.” Retailers are planning new, getting new merchandise quicker, and the power of telling a new story when people may have been shopped out, but are back in your store again, is an untapped opportunity. Lastly, retailers have the opportunity to thoughtfully plan the weeks following Christmas thanks to new technologies.
Question #3: How is the shopper mentality evolving?
Answer: There are quite a few elements to look at when it comes to evaluating the evolution of the shopper. First there is the the increased use of mobile. With 72% of millennial shoppers doing their initial research on their smartphones before purchasing in store, mobile is undoubtedly where a lot of opportunity lies. ShopAdvisor is critical in that opportunity pattern. Next we have the omnichannel experience. The ability to engage the shopper across multiple channels — online, offline, mobile and in-store — is imperative in making the shopper’s path-to-purchase experience seamless. Another consideration is the idea of impulse versus planned shopping. Before Christmas most of it is planned, but after we see a big swing to the impulse side. A big factor driving this are gift cards. There is a lot of opportunity for a retailer to get their share of impulse dollars during the post-holiday season. Rewards and loyalty programs can play a significant role as well. These customer based programs are a paramount now and offer a great opportunity to not only communicate with consumers, but to also gain an understanding of their shopping patterns and take advantage of them in a more personal way. And finally, as previously mentioned, the rise in gift cards, cash gift cards and digital coupons. These can drive very loyal customers into stores who are motivated to buy products. The bottom line is that consumers are smarter and more informed now more than ever. What retailers, brands and agencies need to be thinking about is how to integrate all of these factors into a post-holiday marketing plan that can be incredibly powerful.
Question #4: What are some of the biggest drive-to-store opportunities during the post-holiday timeframe?
Answer: No one can argue that gift cards are one of the biggest opportunities here. The aggregate gift card business reached $130 billion dollars last year and we can safely assume that around 40% of those sales were in the last eight weeks of the year. Additionally, most consumers are reaching into their wallets pretty substantially when using gift cards, spending up to 40% beyond the value of the card. That gift card is a powerful tool! A retailer’s job is to really maximize the return on those consumers when they come into the store. Another opportunity is the exchanges and returns process. One of the biggest opportunities that retailers miss is the buy online and return in store. They need to make the return process as seamless as possible. They also need to be thinking about now that the consumer is in the store, what is the best way to get them to stay and potentially buy more products? Lastly, there’s no denying that stores will always have a clearance/sales mentality during this time frame. Combing clearance/sales with gift cards and potentially even adding value on the gift card for purchases within the clearance are ways to get those baskets sizes up and get more product out the door.
As you can see, the opportunities that brands and retailers have in the weeks following Christmas are certainly there. What it comes down to, is thinking smarter and really taking the time to tap into your consumer’s shopping habits, brand preferences and disposable income so that you can provide an unparalleled path-to-purchase experience for them. By leveraging the latest developments in mobile technology and proximity marketing, brands and retailers can become more agile and nimble marketers.
We want to thank our friend, Ira Hernowitz, for sharing his knowledge with us! In the words of the noble Thomas Edison, “opportunity is missed by most people because it is dressed in overalls, and looks like work.”