There is widespread agreement that the holiday shopping season in 2020 will come early, with some suggesting it will start as early as October 10. This early start makes sense in light of consumer boredom during the pandemic and the desire to get good value. Interestingly, Deloitte, along with some other recent projections suggest an uptick in holiday spending, with an average increase of between 1 and 1.5 percent anticipated.
New data and insights from walk-through marketing experts Zenreach and their CEO John Kelly provides good guidance for brick and mortar retailers attempting to maximize sales and profits in a challenging year. Zenreach draws on its own user base from Wi-Fi access points to gather and analyze data indicative of larger consumer habits and trends. Three major insights from some of the company’s recent findings are discussed below:
1) Retailers Must Show Customers That Safety Is Important to Them
Zenreach’s data shows that foot traffic at retailers fell to just 20% of normal levels immediately after the pandemic arrived. However, it has recovered to about 50% of its normal level for the past three months and traffic at this level has remained steady. While state regulations vary considerably, it is clear that this decline in traffic, is linked to health concerns. Zenreach observes that knowing that half of consumers are still in stores is a testament to the quality of the brick and mortar shopping experience. Indeed, many people are motivated by enjoyment of the in-person shopping experience itself. This level of recovery is also indicative of the possibility of further increases in traffic, perhaps sooner rather than later. That said, giving clear signals to consumers about health precautions being taken by a store is imperative to success.
Retailers should, thus, not only implement measures such as providing hand sanitizer, cleaning areas, and maintaining social distancing/mask policies; they also need to clearly communicate that these health measures matters to them. The effective communication of such policies, especially inside the store itself, will allay the concerns of some who want to shop in person but have been shopping online.
2) Make A Special Effort to Connect With High Value Customers
Whether precisely true across all situations or not, the often cited 80/20 rule, a varaint of the Pareto Principle, via which 80 percent of profits are thought to come from the 20 percent of a retailer’s best customers usually operates on some level. There is little doubt that most retailers make a disproportionate amount of their profits from a relatively small number of their best customers.
Zenreach recommends that when facing limited capacity in stores it is important to ensure that a store’s high value, loyal consumers dominate over low-ticket transactional customers. With data availability what it is today, retailers can pinpoint who their best customers are relatively easily and run promotions aimed at getting these customers to come to the store. The idea of using such data makes extra sense right now, given that loyal, high-value customers are likely to be more responsive than low value customers, especially if they are given the proper incentive. As many consumers report needing a break from monotony during the Covid pandemic in the face of routines and/or hobbies interrupted, properly crafted special offers and incentives from a trusted store are likely to be well received.
3) Leverage Online Advertising to Get the Consumer in Your Physical Store
Many consumers are spending more time online as a result of Covid-related restrictions. As had previously been addressed in this space, online ads and “homefluencers” have taken on new importance during the pandemic with views and engagement levels reaching new highs. Ironically, and in some cases sadly, many retailers have cut back their online expenditures even though it is largely reasonably priced at the moment. Zenreach’s data shows that campaigns by retailers are achieving record success, with some achieving click-through rates as high as 2-3%, which is about 20 to 30 times higher than typical pre-COVID averages.
This retail season will present special challenges for many brick and mortar stores. However, implementing the above strategies will enhance the chances of overall success and, hopefully, help many retailers succeed in a holiday shopping season that is providing unique challenges.