Black Friday, the biggest shopping day of the year, comes with a bit of trepidation for many retailers. It’s that time of the year when shoppers get up bright and early to go stand in line in hopes of snagging some of the most coveted products at some of the most discounted prices. For those who are unfortunate enough to be at the end of the line, their hopes can be quickly dashed when those “doorbuster” promotional products are no longer available. This can mean a potential loss-loss for both retailers and in-store shoppers. Will retailers repeat the sins of the past or will they get smarter and more creative generating sales while creating the best in-store experience for their consumers?
How can retailers prepare to provide an exceptional in-store experience during and after Black Friday that will keep customers coming back?
Wal-Mart is embarking on a unique sales strategy where they are extending their Black Friday sales by opening on Thanksgiving and offering up a special hour where three very popular and big ticket electronic items are guaranteed to shoppers at unbelievably slashed prices. The retail giant promises to have enough of these items in stock for the anticipated demand.
Unfortunately, other retailers don’t have the luxury to offer up such a promise because it’s costly and the demand is unpredictable. This holiday season, rather than turning away customers empty handed, retailers should employ a substitution strategy where customers are offered complimentary products at a competitive price that fits with what they’re looking for. This means, taking a hard look at your overall inventory of products, Black Friday promotional items, assessing expected demand during the peak holiday season and having a fulfillment strategy in place. This will ensure retailers can deliver on the promise of fulfilling their customers’ needs with either the intended product in-store or online, or a complimentary product. This will create a win-win for both retailer and customer.
How can retailers use the store to capitalize on shoppers’ interests and close sales that might otherwise go online?
Digital disruption has fundamentally changed the way consumers shop. According to a survey of more than 5,000 consumers by Deloitte, almost 70 percent of smartphone owners plan to use the devices for the holiday season. Obviously, mobile and other digital devices will play a prominent role for both the consumers and retailers. This means, while online sales are expected to grow this Black Friday, retailers have an opportunity to use the store as a supply chain asset and make every interaction count.
One way to do this is to create a virtual experience for the unique shopper. A good example is REI – where they’ve integrated both the physical and virtual shopping experience at the store – to outfit the customer for their needs. This offers a chance for the retailer to interact with the customer to sell additional products that can be either sold at the store or shipped.
In an omni-channel world, savvy shoppers are researching products online before they hit the stores. The key here is for retailers to bring the mobile experience in-store by harnessing technology to give customers a chance to integrate the mobile, digital and physical experience all in one place. Some of the ways retailers can make this a compelling mobile experience is to use tablets and mobile devices to allow customers to browse additional inventory that may be out of stock, view complimentary products, offer styling tips with tutorial videos, or create mobile checkout capabilities to reduce long lines.
Price wars will be fought and won. How can retailers take a smarter pricing approach to win more customers and drive greater profits throughout the holiday season?
With the biggest shopping event of the year comes fierce price wars between big-box retailers and online retailers. While driving the lowest price on a given product may drive traffic, the real opportunity is building a personalized pricing strategy, such as channel-specific pricing, special coupons for the ideal customer, and rewards for your loyal social following. This year, mobile apps will play a big role in the way retailers personalize and distribute coupons to their targeted customers.
To do this effectively, retailers must understand their customers and segment the one-time customers from the loyal customers. By having insight into this, you will be able to offer promotions that are personalized to that shopper based on who they are, what their purchasing behavior is and the frequency of their purchases so that you can offer specials based on their preferred products. Today, many retailers are lagging behind and this capability is crucial to building a long-term success strategy.
Retail supply chain will be put to the test during this busy time. How can retailers align their supply chain to provide the best overall customer experience – from inventory to pricing to customer service?
The biggest issue in retail supply chain is getting the quantity of inventory right. Hedging your bets on a guess can be a massive and costly strategy. Dynamic supply chain can be a competitive differentiator. In order to mitigate some of the risk of getting it wrong, retailers must take a sophisticated approach to first understanding their inventory levels across regional stores and geographic markets. This way, they can fulfill the demand either in-store or via online shipments (taking products from other regional locations that may have a surplus of the products). This means that gaining inventory visibility and synchronizing fulfillment has never been more critical to retail success, especially on Black Friday.