This year has brought unique challenges for retail businesses. Part of what makes this year so unique is the potential for three distinct trading peaks. So, what are the three peaks this year? And how can retail businesses adapt and prepare for them?
This year has brought unique challenges for retail businesses. With stores initially closed, and social distancing set to be the norm when they reopen, retailers have had to radically adapt their business models.
This has been a catalyst for driving more shoppers online than ever before. The enforced disruption has likely changed consumer behaviour forever. Without doubt, 2020 is turning out to be a landmark year for retail.
Part of what makes this year so unique is the potential for three distinct trading peaks. We’re used to talking about one period of peak – the holiday season, or golden quarter, from the Black Friday week through to Christmas, and then January sales.
So, what are the three peaks this year? And how can retail businesses adapt and prepare for them?
This first peak has already happened, or is happening right now. Whilst many businesses faced extreme difficulties due to consumer confidence crashing, store closures, social distancing measures, supply chain issues and warehouse or logistical difficulties, we did see some retailers experience significant increase in demand during this time, a handful reporting figures in-line with what they’d expect during Black Friday and Christmas spikes.
Lockdown has accelerated eCommerce adoption, and consumers will be more trusting of online and less reliant on seeing products. As we go through a transition with non-essential stores being opened up again, this is likely to impact the demands on Peak, particularly on digital channels.
Though we are now seeing some isolation measures slowly relax, including the reopening of retail stores, this doesn’t mean a return to ‘normal’. Most stores will open with distancing measures that greatly impact the in-store retail experience.
Brands more than ever need to do two things more effectively. Firstly, invest in creating opportunities to engage with customers on a more emotional level so that trust and not just price becomes an important differentiator in Peak. They also need to ensure their strategies enables more consistent and connected brand experiences across all channels.
A PFS study found that 39% of consumers had been encouraged to purchase products online that they had not considered buying online before. This rose to 62% amongst Gen Z, and of 52% millennials.
The study also found that 25% of shoppers had tried new online retailers and intend to continue to shop with them due to positive experiences.
A similar study by Kantar suggested that 60% of users intend to continue buying online once the pandemic is over.
The easing of lockdown measures will mean change in demand. Sports such as golf and tennis have returned, and record numbers of cyclists and runners are on the roads. Children are slowly returning to schools. Social calendars, whilst not back to normal, are being filled with picnics and outdoor activities, as opposed to Zoom pub quizzes.
Businesses therefore need to adopt a more agile approach, and not just rely on running the same summer campaigns that have performed well in previous years. Delivering the right content, at the right time, and at the right price-point will help reassure customers and convert browsers to loyal customers.
For those retailers with a season’s worth of stock sitting in warehouses and closed stores, now is a crucial time. Whilst it’s impossible to fill the void of missing the entire spring retail season, brands must remain agile and adapt to these constant changes to identify opportunities to sell and survive.
The third peak is the traditional peak trading period that all retailers are accustomed to: the holiday season. Retailers tend to plan for this period months in advance. But, with such economical and social uncertainty, it’s extremely difficult to agree a strategy so far ahead of time this year.
Is this season about maximising profits for the year? Or should businesses focus on discounting, and clearing warehouses of stock that hasn’t been sold?
What is certain is that Christmas will happen, and the digital environment is going to play a greater role this year than ever before. Brands need to prepare and start thinking in a different way to how Christmas is going to appear, and have different scenarios in mind to be able to respond efficiently.
Watch our recent webcast ‘The Three Peak Challenge in 2020: A Unique Year for eCommerce’, with Elliott Jacobs from LiveArea and Katie Woodhead from Attraqt, and find out how you can maximise eCommerce opportunities through agile marketing and merchandising efforts. Among other things, you will learn how to engage effectively with shoppers in a multiple peak scenario, the benefits of using AI tools, merchandising strategies and techniques to help you prepare and how to enhance your customer’s journey through connected experiences.
Attraqt powers exceptional shopping experiences for over 300 of the world’s leading brands, manufacturers and retailers. Attraqt combines the benefits of the pioneering Fredhopper Discovery Platform with the award-winning Experience Orchestrator (XO) Platform, to provide a set of API enabled, algorithm-driven, intelligent SaaS services covering personalization, search, navigation, merchandising, recommendations and internationalization.
LiveArea is a full-service, global customer experience and commerce agency. We bring together a broad portfolio of services for end-to-end solutions – from data-driven marketing and omni-channel experience design through technology selection and platform implementation, fulfillment, customer care and orchestrated services, the next evolution of managed services. Clients cover a variety of verticals, including health and beauty; fashion and apparel; luxury; consumer packaged goods, retail; automotive; and business to business.