5 Data-Driven Strategies Retailers Should Consider Now to Prepare for the 2024 Holiday Shopping Season

Although it’s only June, now is the time for retailers to plan ahead for a successful holiday shopping season. Projections indicate that retail sales will exceed $5.23 trillion in 2024, but consumer demand is already outpacing retailer readiness. Proactive retailers must take action now to close the gap or risk leaving profits on the table during peak season.

Here are five data-driven strategies retailers can enact to position themselves for the holidays and ensure they’re addressing shopper demands while balancing customer experience and business efficiency.

1. Deliver personalized experiences to understand customer behavior across channels.

Customer behavior is constantly evolving, with a desire for retailers to offer highly personalized experiences across both online and in-store channels. This poses a significant challenge for retailers to connect and integrate these channels without tapping into unified commerce solutions. For instance, businesses that know the majority of their customers well enjoyed 17 percent higher revenue growth compared to the average last year. Yet, just 28 percent of businesses know the majority of their customers well enough to personalize items. But with the usage of technology, retailers can now capture data to deliver personalized experiences. For example, luxury fashion house Prada is delivering unique and customized offerings for its shoppers using transactional data across channels to present a streamlined experience for customers regardless of their preference for shopping online or in-store.

Loyalty programs are another component that shoppers are keen to see continue, with more than half (62 percent) wanting personalized discounts from their favorite retailers. However, 22 percent of retailers have halted their investment in loyalty programs over the past 12 months. By incorporating unified commerce and loyalty programs, retailers can have a greater understanding of customer behavior across channels.

2. Make in-store shopping faster and seamless with innovative checkout methods.

Shoppers are hungry for frictionless in-store experiences that let them make purchases without the hassle of multiple touchpoints. To appeal to this shopper demand, retailers need to ask themselves, “Are we offering the right checkout methods?”

For instance, 25 percent of consumers want retailers to use technology to make in-store shopping faster, and almost half (49 percent) of consumers want to see self-checkout options. But again, retailers are falling behind: less than a fifth currently offer self-checkout. Retailers that upgrade the in-store experience with innovative checkout methods can provide shoppers with the cross-channel and in-store experiences they expect.

3. Lean into the growing trend of social commerce.

Social commerce is taking off, bringing new challenges for retailers to merge these channels with their standard online and in-store channels to ensure an efficient and consistent shopper experience. According to the 2024 Adyen Index, consumers shop an average of three times a month on social media. Of those consumers, the majority were millennials (83 percent) followed by Gen Z (67 percent), Gen X (43 percent) and boomers (19 percent).

This also presents a significant opportunity for retailers: 80 percent of retailers reported revenue growth after enabling social commerce channels, according to the 2024 Adyen Index. By leaning into social commerce and appealing to younger generations’ preferred shopping experiences and payment methods, retailers can improve business efficiency while delivering more freedom for shopper journeys in choosing how, where and when they buy.

4. Tap loyal buy now, pay later (BNPL) customers to increase sales volumes.

Although BNPL has received some critical press, new waves of regulations are instilling trust among retailers and consumers. For instance, the 2024 Adyen Index shows that 86 percent of U.S. consumers use BNPL once a month and spend about $530 per transaction, compared to about $295 globally. In addition to consumer usage, BNPL is also growing for B2B transactions as a means of managing cash flow, eliminating payment defaults, and managing fraud risk. Retailers that enable BNPL can reap the benefits of increased sales volumes while also tackling hurdles in B2B transactions.

5. Tighten return policies to combat fraud.

Today, retailers are combatting a surge in fraudulent returns, with U.S. retailers losing an average of $2.9 million to fraudulent activity per year. More than half (52 percent) of businesses say fraudulent transactions and chargebacks are a significant cost to business. Trust between consumers and retailers is paramount to creating an efficient customer experience and a safe space for consumers, and retailers that implement tightened return policies can help foster that experience to help consumers feel comfortable sharing payment details.

Retailers that incorporate these five data-driven strategies can transform their business operations to improve sales and customer loyalty ahead of the holiday shopping season. While new technology and rising customer expectations are constantly evolving and setting new standards, challenging times often provide the richest growth opportunities. It allows retailers to get ahead of the curve to stay on the cutting edge of new advancements in payments.

Alex Rhodes is global head of unified commerce at Adyen, a global financial technology platform.