Tips for Shifting From Back-to-School to the Holiday Season

In a previous article, I reviewed inventory management strategies that retailers can implement after the back-to-school (BTS) season to help make room for the holiday product line. Now I'll focus on the opportunities retailers have to incorporate learnings from the BTS shopping cycle into the critical holiday season.

BTS activity serves as an excellent testing ground for holiday shopping interest because there's a significant common factor between the two seasons: they're both largely driven by parents making purchases for their children. Retailers can leverage data from their BTS performance to optimize consumer messaging, product placement and the in-store experience for the holiday season. The key (and challenge) is speed, as there are only a few weeks between the end of BTS and the beginning of the holiday push. Leading retailers will analyze BTS performance and rapidly implement initiatives in October.

Consumer Engagement 
Marketing technology evolves every day, and nowhere is that clearer than in the mobile space. The number of people who own smartphones has been increasing year-over-year, which presents a significant opportunity for retailers to connect with consumers both inside and outside of the store.

Inside and around the store, newly emerging beacon technology helps retailers track shopper movement and offer opportunities for extremely personalized, real-time deals. Push notifications are sent directly to a customer’s mobile device based on where they're standing in a store and which shelves they're browsing. The advantage of beacon technology over traditional Bluetooth/Wi-Fi services is the precision of the location services. Retailers can now know exactly where a customer is standing and who they are.

Leading retailers and consumer packaged goods companies are expanding the use of beacon technology by investing in digital marketing signage within stores. This emerging technology solves the issue of consumers needing to walk around stores face down in their phones in order to view personalized content. Imagine a consumer grocery shopping and passing by an end-cap with a digital sign that advertises a sale on a product that he often purchases. Without breaking stride, the shopper is able to turn down the aisle to locate the product. Once he's turned down the aisle, the digital sign changes to display another personalized offer to a different customer walking past the end-cap.

Retailers are also taking advantage of smartphone technology via applications to customer loyalty programs. The days of key chain tags or cards are quickly fading in favor of smartphone loyalty apps that offer instant coupons, event notifications and store purchase history. Leading retail organizations are using customer loyalty apps to improve the customer experience (e.g., streamlining returns processing in early January) as well as analyze recent purchasing patterns collected through the app during the BTS season to craft customized holiday marketing materials.

For retailers experimenting with mobile and app-based marketing efforts, a BTS performance analysis will be especially critical to support informed, last-minute adjustments before the holiday season is in full swing.

Product Placement
For the vast majority of retailers, national-level inventory commitments (i.e., purchase orders) for the holiday season were etched in stone long before the end of the BTS season. However, there may be flexibility to adjust regional-level or market-level inventory allocations before holiday products ship to stores. Leading supply chain organizations will partner with their merchandising teams to make last-minute inventory allocation changes based on BTS sales analyses against key product attributes. BTS sales may highlight an unanticipated trend in a given market cluster that, if not corrected, will lead to excess inventory or stock-outs in select stores. Retailers operating within a flexible fulfillment model will adjust inventory allocations based on BTS season assessments once products hit domestic distribution centers.

In-Store Experience
Store operations also benefit from BTS performance analysis. The holiday season represents the largest spike of customer traffic every year, necessitating an increase in store associates on the sales floor, in the back room and for the management of multichannel product orders (e.g., buy online, pick up in-store). While the BTS demand spike tends to be less concentrated, many retailers do hire temporary workers and adjust associate work schedules to meet consumer demand. Store management should perform a hindsight assessment on the effectiveness of their labor schedules, with a specific focus on the impact of managing online orders. Then they can adjust their holiday staffing accordingly.

Given the similarities between the BTS and holiday shopping seasons and their back-to-back timing, retailers stand to gain significant benefits by applying key learnings gained in August and September to the critical end-of-year holiday push. A properly executed hindsight exercise will identify opportunities to improve both internal and customer-facing operations.

Andrew Billings is a principal and senior leader in North Highland Consulting’s Retail and CPG practice.