Thinking

Digital Christmas: a new path to consumerism?

Although most of us think about Christmas a few months beforehand, many retailers start thinking about Christmas at least six months in advance, and this year’s Christmas offering would have been decided when Covid-19 hit.

Although most of us think about Christmas a few months beforehand, many retailers start thinking about Christmas at least six months in advance, and this year’s Christmas offering would have been decided when Covid-19 hit. In order to adapt, retail organisations need to strike a balance between staying financially healthy and applying a customer-centric view, amending their business model in the long term. Based on our research and experience, we believe that this Christmas customers are looking for:

  • Seamless customer experience - pleasant staff, quick delivery, and finding the required items easily
  • Safety - feeling that their health is not at risk when shopping
  • Flexibility - longer return and refund policies, store credits, and alternative payment options. In fact, a Global Index study carried out by Selligent found that 81% of consumers are now more grateful for the ability to backtrack on their purchases, valuing a retailer’s flexibility towards returns and cancellations.

As a result of the worldwide pandemic, many industries have had to adapt, with some experiencing a deeper negative economic impact than others. 

While there is an on-going uncertainty about whether the physical shops will close down over the upcoming weeks, retailers have started to think about their customers’ changing needs. John Lewis launched their Christmas selection in August, giving customers longer to choose the perfect item for their home. In fact, the retailer went the extra mile and launched a ‘Virtual Christmas Shop’ on their website, allowing customers who cannot go to the store to have the full shopping experience.

To add to the complexity, some customers will look to online retail for its quick and easy shopping experience, and some, due to months of lockdown, will seek the physical store. There are also multiple Christmas shopper personas to consider, from the ‘early bird’ to the ‘at-risk’ to the ‘last-minute shopper’. Retail organisations should therefore focus on both their in-store experience and increasing their online presence. For the brick and mortar stores, there are ways to take advantage of the current situation.

As we mentioned in our previous video, physical stores need to consider how their layout will cater for customer safety, allowing sufficient social distancing and safety measures. Staff can also help deliver a safe experience. For example, Apple has introduced queue management and limiting access to the store itself. Assuming retailers are looking to hire extra staff this Christmas, it may be worth considering how these ‘extras’ can be best used to help: will they support delivery to homes or packing the click & collect bags? Will they deliver bags to the customer’s car at the car park? 

Regardless of what your retail strategy might be, an increase in online shopping will likely be the rule not the exception this Christmas. To understand whether your organisation’s online presence is sufficient, consider:

  • How can you change your website to improve the customer's journey? Can it handle a large volume of visitors? Will extra delivery slots be available?
  • What advertising will you use to promote your website and will you use discounts?
  • The voice of the customer - do you know how your customers are looking to shop this Christmas? What would make them shop online more? 

Retail organisations will need to create new business models to cater for the level of uncertainty in the current climate and sustaining these long-term. Could digital innovation help support this? For example, Tesco is trialing drone deliveries in one of their Galways stores. If successful, this would provide a quick and safe alternative to in-person deliveries. Retailers should further explore concepts such as virtual queuing and mobile payment.

It is also key to consider the impact of Covid-19 on families and their Christmas celebrations. Many food retailers offer a combination of in-store and online orders as early as three months in advance this year, and the director of product development at M&S, April Preston, said that “We won’t want to confine Christmas to one day, we’ll be looking to extend the festive season and turn it into a series of moments, celebrating with loved ones in whatever way we can.” However, companies can do more to improve the customer’s overall journey by considering new initiatives such as big supermarkets offering outdoor market-type collection points or creating personalised online ordering.

Additionally, with the increasing use of technology, retailers can look to market their items in novel ways, for example through social media. According to a survey conducted by Valassis, “40% of consumers are more likely to trust a brand that features an influencer they know”. Therefore, companies could consider using influencers to help market desired products and increase sales at a time when a second lockdown may be imminent.

As your retail organisation is approaching the Christmas period, reflect on:

    • What makes your organisation unique and how can you change your offering to meet newly emerging customer needs?
    • How can you create a better, more seamless customer experience?
    • How will you adapt your strategy over the long-term, and cater for multiple customer groups?
    • Are you sufficiently flexible when being customer centric?