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Fraud indications, capacity numbers and customer experience platform changes are concerns that members of Protocol's Braintrust say should be under the microscope.
CTO at Riskified
This holiday season promises to bring new challenges for retailers. Fortunately, they got a crash course in what to expect as the pandemic began. Many saw huge increases in ecommerce order volume, influxes of new customers and changes to fulfillment methods.
Labor Day, for example, saw a 35% year-on-year increase in the average amount spent. Much of this was from new customers, as the pandemic pushed in-store shoppers online and prompted even seasoned online customers to try new retailers to meet their needs. Fulfillment methods shifted as customers sought to get their goods safely. Customers opting for curbside pickup increased by 125%, and gift cards were hot commodities, with transactions rising by 245% and 140% on Mother's Day and Father's Day, respectively. These are the signals that retailers should keep an eye on as the holidays approach. Spiking case numbers will drive shoppers to prioritize social distancing, leading to increases in curbside pickup and gift cards. And new customers are likely to be the norm.
These changes can challenge retailers. Pre-pandemic, many of these behaviors were typical of fraudsters. Merchants don't sell to fraudsters twice, so they pose as new customers. They love curbside pickup because it doesn't require a shipping address, and gift cards are targeted because they function like cash. But patterns that were once risky are now common, and retailers that don't adapt risk turning away legitimate customers.
It may be a challenge, but the influx in new customers is also a great opportunity. As long as retailers understand how and why customers shop, they can be confident in their approvals and seize the chance to turn first-time shoppers into lifelong customers.
Managing Partner at Revolution Ventures
This will be the "prove it" year for ecommerce players who don't want to be overshadowed by Amazon. Instead of focusing on marketing, all attention needs to shift to operations. Unlike past years where the winners were ecommerce sellers that created demand during the holidays, 2020 winners will be the ones that can meet it.
Delivery and logistic systems are going to take a major hit as those labor forces get sick. Retailers need to reassess their agility, understand every nuance within their operating models, and get out in front of any warning signs and risks. By preemptively running stress tests to better understand the durability of their supply chain and appropriate inventory buffer levels and whether to scatter distribution geographically, business leaders can better manage operational risk during what will likely be an erratic retail rush. Retailers need to lock in their delivery capacity, identify alternative providers, and plan for peak-season fees. Large shipping carriers like UPS have already said they will be more selective in terms of what goes through their network, as they can no longer offer more capacity at the flip of a switch.
As with every year, a large swath of consumers will be last-minute shoppers, but delivery networks will be overloaded satisfying this surge. Those companies that can figure out how to maintain capacity to deliver in the last couple days of the holiday season will have a potentially large windfall. And those that overpromise and deliver a Christmas gift on Dec. 26 risk losing customers for the long term.
Managing Partner at Forerunner Ventures
On the one hand, people are certainly in need of a little cheer this year, and I imagine they will be looking for ways to feel good. With events and travel off the table, some people will turn to gifting as a means to celebrate. That said, overall I would not be surprised to see a more tempered season. Fewer in-person events means fewer decorations, party outfits, gift exchanges. And fewer trips to the store likely means less impulse buying for oneself, which traditionally accounts for a meaningful part of holiday sales.
Also without in-store Black Friday sale events, the selling season started early and will play out over a longer period of time; less urgency might yield less action. And inventory shortages are real this year. Many retailers and brands shifted inventory production plans as COVID-19 came on the scene, and as demand has rebounded or exceeded initial fears of declines, they have faced challenges chasing goods in time.
Executive Vice President of Product at Zendesk
If your inbox, text messages and social media are anything like mine, you are being inundated with an avalanche of incredible offers and discounts from every company you have ever purchased from. While we prepare our families and our businesses for a third wave of COVID-19 in the U.S., retailers are using this year's peak shopping period to adapt and adopt new ways to serve and support their customers without relying on the usual in-store experience.
The first signal retailers should be watching for is a higher volume of customer requests. Forget predictability in 2020. Zendesk's Benchmark Average ticket volumes remain significantly higher than last year. With customers increasingly shifting their buying online, the sustained rise in ecommerce tickets makes sense. According to McKinsey, more customers plan to continue buying online. Teams should prepare now for tickets to stay high for the weeks and months to come.
To help manage this, businesses need to meet customers where they spend their lives — on mobile devices and social media — not only to discover new products and offers, but to make it easier for customers to get the help they need throughout their entire shopping experience, whenever and however they want it.
Overall, customers often prefer to interact with businesses via the messaging channels they are already using, thanks to how easy and convenient they are. In fact, Zendesk saw a 50% surge during the first half of 2020. To help retailers manage their social commerce strategy, companies can use modern messaging channels, like Facebook Messenger and Instagram DMs, to immediately engage with customers, share information and respond to questions.
Retailers that watch and act on these signals this holiday season, from department stores and designer boutiques to fast fashion and direct to consumer, will be the future game-changers.
Senior Director, Commerce Strategy at Adobe
COVID-19 is changing business and consumption models in both predictable and unpredictable ways this holiday shopping season. A starting point is to understand that it's currently a tale of two consumers. While millions have lost their jobs, many who remained working skipped expensive vacations and as a result, they have more discretionary income to spend. As the pandemic continues, the likelihood increases that consumers with disposable income will purchase big-ticket items fit for a pandemic lifestyle. However, these higher-priced items come with a few "gotchas" for businesses: While they produce higher profit margins, they also represent risk in the form of unsold inventory and expensive returns. This holiday season, it's critical to ensure adequate product availability, lock down contracts, and get items to customers on schedule.
Yet at the same time, many cash-strapped consumers will be looking for bargains. Retailers must address this segment of the marketplace, too, when thinking about their discount strategies for the holiday season. In many instances, it's critical to rethink how shopping and sales take place, both at physical stores and online. Although most stores have already modified their layouts and displays, it may be necessary to regulate the number of people allowed in a store — and strategize how to manage people camping out for a Black Friday opening.
The goal for retailers should be to use technology to automate as many processes and tasks as possible — and avoid, quite literally, touch points that spread the virus. This requires executives to get an early start on securing inventory; working out the kinks in curbside pickups; automating warehouse processes; and streamlining checkout, support and return processes to reflect this new normal.
CEO at Ecwid
This year, the COVID-19 pandemic accelerated the upward trend of ecommerce as a proportion of total retail consumption. Businesses updated their digital strategies, and many established their ecommerce capabilities for the first time. Pivoting online helped both the smallest retailers and big-box chains alike accommodate mandatory closures and meet consumer demand. Over the next month, the most successful businesses will be those that track engagement and trends across channels to inform their 2021 business strategy, facing the increasingly likely second wave of COVID-19.
Consumers now expect the convenience of shopping online not only within familiar categories like apparel, but for everything from grocery delivery to everyday essentials, and even cars. During this holiday season, businesses need to examine which product categories receive the most attention and tailor their product strategies and marketing to these findings. It's also important for businesses to track which marketing channels drive the most engagement and sales. Whether it's search, email or social media, identifying the highest-performing channels will inform future ad spend. Ultimately, these insights will help to optimize sales and marketing channels to best reach and retain shoppers long term.
Head of U.S. Brand Ads & Partnerships at eBay Ads
You can tell a lot about people by the way they shop. The pandemic accelerated the shift away from physical stores into digital platforms by five years (IBM U.S. Retail Index), so we have more visibility into a broader set of shopper signals than ever before. Whether it's the length of the shopper journey, number of brands considered, or the most common color in shopping carts, the signals reveal the shopper mindset.
Concerns over shipping times and inventory availability drove consumers to start their holiday shopping earlier this year. According to our 2020 Holiday Study, nearly a third of eBay shoppers started shopping before Sept. 30. They're adjusting to the new realities of ecommerce and changing their expectations around availability and delivery times.
Holiday shopping typically means big crowds at brick-and-mortar stores. This year, in-store Black Friday will be significantly smaller. Retailers, brands and marketplaces like eBay are already promoting Black Friday deals, and consumers are taking full advantage of them. It's clear that the in-store, one-day-only experience is giving way to the practicality, flexibility and safety of finding deals online.
Holiday gifting is trending toward traditional categories and family fun. Throughout spring and summer, we saw spikes in pandemic necessities like hair clippers and 凯发k8官网下载手机版home office items. But in September, as holiday shopping on eBay began, we saw a 72% YoY lift in LEGO purchases and 89% YoY lift in video game consoles sales. This month, video game purchases increased by 130% YoY. Jigsaw puzzles are one category that got hot earlier in the year and remains that way for holiday. In September, we saw a whopping 228% YoY sales lift.
See who's who in Protocol's Braintrust (updated Nov. 18, 2020).
Questions, comments or suggestions? Email email@example.com.
Kevin McAllister ( @k__mcallister) is an associate editor at Protocol, leading the development of Braintrust. Prior to joining the team, he was a rankings data reporter at The Wall Street Journal, where he oversaw structured data projects for the Journal's strategy team.