7 Ways Retailers Are Preparing for the Digital-First Holiday Season

Retailers don’t know if what they’ve seen from shoppers since the onset of the pandemic is a new set of permanent habits or only temporary reactions to a global shopping shakeup. Therefore, how can retailers prepare for the holidays in light of unpredictable store strategies and a mass migration to digital shopping channels?

At a recent gathering of the DTC Collective, I joined retail leaders from companies including QVC, Lane Bryant and Jerome’s Furniture to tackle this very question. Our resulting report, Retail Executives Explore How New Shopper Behaviors Will Influence the Digital-First Holiday Season, addresses how retailers will continue to operate in a nearly 100 percent digital environment as store and in-person strategies continue to evolve.

Here are seven ways retailers are preparing for the digital-first holiday season:

1. Retaining quarantine shoppers: Consumers have been open to trying new brands during the pandemic, likely because they’ve had more time at home to research, browse and shop. Since March, apparel brands have seen up to a 133 percent year-over-year increase in first-time purchases, and sports/outdoors brands have seen increases up to 195 percent YoY. Brands’ focus is on retaining these new buyers and offering them experiences that will turn them into loyal customers, especially during the holidays.
2. Adopting technology that moves at the speed of consumers: Anticipating what the holidays and beyond might look like won't matter if brands cannot respond to customers quickly. Brands are prioritizing technology investments that can move at the speed of the consumer, and are forgoing the request for proposal (RFP) process that’s standard in the technology search. Instead, they're looking for quick-to-market proof of concepts (POCs). They’re onboarding technology that can quickly show its worth through a significant return.
3. Testing new techniques to keep consumers engaged: While brands have always spent time testing campaigns and strategies ahead of the holidays, this year brands have also been testing new engagement techniques to keep customers interested. Due to store closures, all retailers have had to rethink how they engage with customers. However, retailers that rely heavily on customers coming in-store to experience a product (think furniture, beauty, wedding dresses and suits, etc.) have had to completely uphaul their strategies. Brands have introduced virtual stylists, master classes, and started selling over FaceTime to mirror that one-to-one experience customers were receiving in-store. Many brands also have tapped into their digital communications to provide unique offers, like promotions to customers based on their discount preferences (e.g., some consumers don’t need a discount to buy, while others won’t purchase without a 40 percent discount).
4. Getting creative about excess inventory to save margins: Many brands have been left with an excess of product to sell in a short time period, due to different inventory and supply chain issues. While usually they would use discounts and other channel partners to offload inventory, they can’t sacrifice those margins right now. Brands are tackling this issue with digital communications that create the appearance of scarcity, recommending products based on a combined understanding of margins and relevance, and only surfacing discounts to shoppers who need them to convert. Many brands are also veering from seasons, bringing back older, seasonal inventory that was never fully pushed, and positioning the items as new, more evergreen pieces.
5. Determining brand positioning on social responsibility: Brands are becoming increasingly aware of how they influence the community and what their responsibility is or could be as change-drivers in the diversity and inclusion movement. While many brands typically lean into holiday to tell their most inspirational stories, this year, they’re focusing on moving forward as a diverse community.
6. Preparing for less consumer spending during the holidays: Even with U.S. e-commerce sales up 18 percent, brands are bracing for a potential change in consumer behavior that's not in their favor, especially as stimulus checks expire. Brands are looking even more closely at retaining their most valuable customers and identifying the cohorts of consumers who are not experiencing the negative economic effects of the pandemic, including shoppers who are “revenge spending” or shifting what they would normally spend on travel and dining to luxury brands.
7. Creating retail spaces that are experiential rather than commerce-focused: Why would people visit a brand’s retail space instead of just ordering online during a pandemic? Brands are rethinking the purpose of their brick-and-mortar and pop-up stores, and the idea of “experience shops” are emerging faster than ever before.

As we continue to rapidly shift to a digitally dominant retail environment, the retailers that build a digital-first foundation to support their business through the holiday season and beyond will accelerate their rebound.

Sarah Cascone is the director of marketing at Bluecore, a retail marketing technology that reimagines how retailers communicate with their customers through email marketing and website personalization.