Consumer Behavior
Key challenges, opportunities facing retailers this holiday season
Retailers that go above and beyond to meet the challenges and capitalize on the opportunities of the 2021 holiday season will reap the customer loyalty rewards. Those that don’t will be left out in the cold.
December 10, 2021 by Fang Cheng — Founder and CEO, Linc
The 2020 holiday season was a high point for e-commerce and 2021 is expected to drive even greater volume and revenue. Retailers are eager to grab their piece of the holiday (pumpkin) pie, but, just like last year, this holiday season will feel the ripple effects of the continuing pandemic and its influence on both the retail landscape and consumer behavior. Here's what we see as the biggest challenges and opportunities facing omnichannel retailers this year.
Challenge: The supply chain's effect on customer support
It's difficult to overstate the scale of the current global supply chain meltdown; which has led to shortages of everything from alcohol to books to new cars. The intersection of the ongoing pandemic, crowded ports, a decimated trucking industry, changes to carriers' delivery standards, manufacturing slowdowns, raw materials shortages, and weather events has resulted in what experts call an unprecedented 'perfect storm.'
Support inquiries related to customer orders skyrocketed during the pandemic and supply chain woes are only prolonging the trend as anxious shoppers look for updates on inventory and shipping timelines. A website banner advising customers to order early or a disclaimer about longer-than-usual shipping times won't cut it. This season, your customers will be looking for on-demand, real-time full order lifecycle visibility to understand where their order is in the fulfillment process and when they'll receive it.
Opportunity: Upselling and cross-selling
As of July 2021, average spending per shopping occasion across retailers was up 20% over 2019 levels. Pandemic-weary customers are hungry for one-stopping shopping or as close to it as they can get. This offers a golden opportunity to help them check multiple gifts off their list in a single transaction, increasing your average order value in the process.
This year, smart brands will invest in making product discovery as easy as possible for customers, leveraging AI to provide personalized, contextual product recommendations based on previous purchase history and current intent. 'Tis the season for relevant upselling and cross-selling.
Challenge: Returns and order modifications
Returns of online purchases doubled from 2019 to 2020 and they'll again be a challenge during the 2021 holiday season.
Eliminating returns isn't realistic, but building out your pre-purchase product discovery support can help your customers get more purchases "right" the first time. Take steps like engaging customers before they buy via webchat and providing support for understanding promos and applying discount codes within your checkout flow. You'll also want to remove as much friction as possible from your returns process, which increases customer confidence in purchasing. Shoppers should be able to initiate the return from their device of choice, opt for the return method most convenient to them and access up-to-date, on-demand information on the status of their refund.
You'll also need to be prepared to handle order modification requests. These are becoming increasingly common as shoppers look for greater flexibility across the order lifecycle, including the ability to add or remove items and/or change fulfillment or payment options before their order ships. Linc's own research shows that the longer the fulfillment window, the more customer inquiries brands receive about order modifications.
Opportunity: CX automation
If you're a retailer that has struggled to recruit and hire this year, you aren't alone. Seasonal staff are scarce, with only 2% of retailers reporting they've been able to hire without issue. Even if you haven't been able to staff up your contact center as in previous years, you can still deliver outstanding customer support by leveraging CX automation. AI-powered digital workers effectively deliver automated resolution for up to 85% of the high volume of CS inquiries your brand receives — at scale. Using AI-powered digital workers that provide real-time, cross-channel engagement and assistance across the full order lifecycle means you can insulate yourself from fluctuations in the retail labor market and reduce the burden on your limited human agents.
Bottom line: Cultivating loyalty is more important than ever
Customers have few qualms about switching brands based on customer experience at the best of times, but brand loyalty will be in shorter supply than ever this holiday season. Product shortages, shipping delays and lack of customer support will have shoppers turning on a dime as they search for retailers that can meet their expectations and remove the stress from the holiday shopping experience. Brands that go above and beyond to meet the challenges and capitalize on the opportunities of the 2021 holiday season will reap the customer loyalty rewards, while those that don't will be left out in the cold.
Fang Cheng is the CEO of Linc
