The peak holiday shopping season is always important for retailers. This year, it will be more critical than ever—and even more difficult to get right.
With total retail sales down significantly for the year across most retail sectors, peak season represents a crucial time for retailers to capture lost revenue. However, unlike years past, peak season 2020 will be characterized by unique challenges created by the global pandemic that will require retailers to approach the season quite differently.
eCommerce demand is likely to remain high and store traffic will continue to be limited—significantly so, if a surge in COVID-19 cases requires a new round of lockdowns. Even more challenging, customer behavior will be extremely hard to predict with many big unknowns, adding a whole new level of uncertainty that makes planning far more difficult than during "normal" times.
Aligning marketing messages, offerings, and stores with consumers’ values and their current situation will be especially critical this year, and will have a major impact on how and where people decide to spend their money.
A different set of priorities for retailers
Retailers will need to focus on four key priorities to be successful this peak season.
Augment and sustain digital assets
With the surge in online shopping expected to continue, retailers need to make sure their ecommerce capabilities are up to the challenge.
Spread the peak over multiple weeks
To address reduced store traffic, prevent congestion, and best leverage fulfillment capacity, retailers should encourage customers to shop earlier.
Operate every day like it’s peak season
Retailers need to ensure that operational execution is nearly flawless across all channels to capture and satisfy consumers this season.
Focus on visibility and agility
Retailers need detailed visibility into demand changes and inventory, and a correspondingly agile approach to quickly pivot in response.
And a different approach for retailers
Across the preceding priorities, retailers need to do things very differently this year to make the most of this season.
They should make highly visible changes in physical stores to build consumer and employee confidence that the store is a safe environment, while considering how they can use their online presence to engage with customers in new ways to dramatically enhance the experience.
In the store, retailers need to build consumer and employee confidence that the store is a safe environment through highly visible changes.
To make sure they have the products available where and when they’re needed, they should revisit and deconstruct their forecast to independently adjust each lever to more precisely match their forecast with consumer trends and build in flexibility by postponing their supply decisions until the last minute.
They also should stress test their ecommerce systems (including their mobile presence) to confirm they can handle two to three times the traditional peak to avoid crashing, and redouble their efforts to create a seamless experience between their online and physical stores.
Creative thinking about how to best leverage their existing assets, as well as third-party vendors or other retail partnerships, for convenient pickup or drop-off of packages will be vital to making sure the capacity’s available to fulfill orders.