Technology Planning: What Retailers Should Do Now to Prep for the Holiday Rush
Successful retailers are in the business of constantly optimizing profit by having the most impactful assortments, competitive offers, and the right inventory levels. Balancing these tradeoffs during the holiday season is especially challenging and requires that retailers invest in more flexibility, agility, and automation.
Retailers will need to think differently when it comes to technology planning. With the holiday season looming, now is the best moment to develop a long-term technology strategy geared toward capturing more holiday sales in addition to driving revenue growth all year long.
Understanding a few key areas can help get the planning process started. This includes: exceeding consumers’ holiday shopping expectations, making holiday shopping more convenient, and enabling a holistic holiday shopping journey.
Consumer Expectations During the Holiday Season
For holiday shopping, retailers have trained consumers to expect promotions during two time periods: Black Friday/ Cyber Monday and the weekend before Christmas.
The challenge with the holiday season is the short promotional window. The Black Friday build-up is one week, and the weekend before Christmas is, well, just a weekend. There is very little time to get it right. Organizations need more robust capabilities to solve two key challenges in this regard: running out of stock on the most successful holiday promotions and leveraging the same promotions to increase baskets and full price sales.
Creating an agile promotional capability has become table stakes. Cloud computing and machine learning are enabling robust competences such as ‘Web Scraping’ whereby retailers can easily search the e-commerce marketplace for competitive promotions allowing them to quickly react to what others are doing. In addition, the ability to quickly deploy and measure promotions is far easier than before.
We are seeing more robust planning and forecasting tools that can look at multiple data sources, not just historical sales, to better predict stockouts, promotional and basket behavior. Organizations need to take a serious look at the external factors that drive traffic and incorporate them into their planning models. Leading retailers are seeing significant improvement by looking beyond their four walls.
Making holiday shopping more convenient and impactful
Why drive to a mall, park far away, and stand in-line to check out? These inconveniences have become especially pervasive during the holidays. That said, consumers still crave an experience, and going shopping remains ingrained in our culture. We want to stand in line for a picture with Santa Claus. Retailers simply have to do a better job at making it more valuable and less inconvenient.
In response, retailers should consider a variety of capabilities to make both the online and in-store experiences more convenient and seamless. The list of solutions is long, including: virtual personal shopping aids, heat maps, check-out kiosks, mobile payment options, and aisle planning tools.
These capabilities also make it easier to hire and train temporary staff, reducing operational costs and providing a better in-store environment during the holiday season. Many of these capabilities can be provided as service during this critical shopping period of the year.
Enabling a holistical holiday shopping journey
Another important consideration is providing a holistic online and in-store shopping journey. This capability is finally coming to life and should be part of any overarching technology strategy to create convenience and consistency while deepening the customer relationship. It can be especially impactful when purchasing those special holiday gifts.
While the majority of consumers shop online for holiday gifts, they tend to first visit brick-and-mortar stores to see, touch, and feel products. In-store pickup also trends up around the holidays — especially for last-minute gift giving. According to a retail study by Infosys Consulting, more than a quarter (26%) of shoppers regularly order online and pick up in store, and of these, 41% make additional in-store purchases most of the time.
With integrated loyalty tools, we can identify the same customer both online and in store. We can track his visits and create a cohesive interaction whether through a store associate or an online customer service chat box. We can also integrate reminders and customized promotions as part of the journey to generate excitement around key holiday shopping cycles.
Technology planning is the gift that keeps on giving. It’s not too late to get started in building a technology strategy to ensure you are ready for this holiday season and many more to come.
Jerry Kurtz, North America Leader for Consumer Products, Retail, and Logistics, Infosys Consulting. Jerry leads our growing consumer goods, retail and logistics practice in North America, which leads transformation work for some of the world’s largest brands. He joined us from IBM where he had a long and distinguished career. In his capacity as North America lead partner for IBM’s cognitive and analytics service offering, Jerry drove annual practice revenues in excess of $1 billion for the firm. While there, he developed and launched their advanced analytics for IoT capability globally, led their big data practice and oversaw some of their biggest ERP programs with signature brands like Pepsi, Sony, Gillette and Coke. Jerry is a consulting industry veteran, with more than 25 years in total across both IBM and PricewaterhouseCoopers – the latter of which he became one of the firm’s youngest partners at age 32. His areas of expertise include advanced analytics, artificial intelligence, IoT, enterprise transformation (including ERP), and shared/business services. He also did two stints living abroad in Japan while in previous roles.
Joel Alpert, North America Retail Operations, Infosys Consulting. Joel has over 20 years of industry and consulting experience within the retail sector and consumer products sector. His work spans multiple industry specializations and areas of expertise across business functions and technology. His experience includes strategy, growth and operational transformation with strong subject matter knowledge across the value chain. Prior to joining Infosys Joel worked at PwC, Deloitte, Disney, Children’s Place, Garan and Haddad Brands.