For years now, retailers have witnessed the Golden Quarter expanding as consumers start their Christmas shopping earlier. Just consider how last year we saw the lockdown affecting Black Friday and the Christmas shopping period. However, this year will see just as much disruption. The recent supply chain shortages and the desire to ensure Christmas makes up for last year’s has led to people buying earlier and spending more. In fact, our latest research with GWI shows 29% of gift givers in the UK will plan for their winter holidays at least a month in advance.
What does this mean for retailers? The days of prioritising a December peak and the ‘Christmas period’ have gone. On the contrary, the ‘Christmas period’ has started and this is shifting demand on supply chains across the whole quarter. So, retailers need to make key changes and ensure they are better prepared to navigate this longer demand peak. And there are three key elements they need to consider to truly reap the benefits from the whole period.
Omnichannel has never been more important. The need to provide an efficient omni-experience was evident this year and those retailers who were able to scale their online business thrived amid continued disruption. With a longer peak, creating and sustaining the seamless experience between in-store and online is a must.
In order to achieve this experience and enhance interoperability between warehouses, fulfilment centres and deliveries, intelligent decision-making is key. With customer expectations continuing to rise and new priorities such as sustainability coming to the fore, retailers must be able to respond efficiently to meet these needs in a profitable manner.
Artificial intelligence (AI) can enable this by driving better forecasting and order decisions to ensure products are at the right place. This allows shoppers to buy from wherever, whenever. Additionally, with the rise of online shopping, technology can help retailers introduce visibility and tracking into their last-mile deliveries, enabling greater efficiencies and better communication with their customers. At peak times, customers will need to understand real-time availability in order to get what they want, where they want and be able to choose between same day delivery and pick-up options. Technology can therefore support retailers to stand out from the crowd and offer the best omnichannel experience, meaning customers will be fulfilled and able to shop through any channel seamlessly throughout the entire peak period (and beyond!).
The store remains important in the Golden Quarter
While retailers need to focus on their omnichannel experience, the store will be just as important for an extended peak. Many assume the popularity of online shopping and decline of the high-street is set to continue, but many stores will still be a dominant force in retail. It’s true that online shopping will continue to grow – with our recent data alongside GWI, revealing an overwhelming 91% of consumers estimating their online shopping will either stay the same or increase, but the store remains important. This is most notable within grocery, as 35% of UK consumers purchased groceries online in the past month in Q2 2021, compared to 25% in Q1 2020.
In order to attract consumers into high-street stores throughout the peak period, retailers will need to offer greater differentiation between in-store and online experiences. Understanding the different experiences customers want from different channels is crucial here. Immediacy of purchase, enhanced customer service and the physical experience will become a key distinction, placing even greater emphasis on availability.
Introducing technology that supports cost management, including efficient utilisation of a motivated workforce, as well as control on other fixed charges will be key. Additionally, technology will need to be used to optimise retail spaces, as we’re now seeing this across certain grocers like Tesco, who have reinstituted cashier-less shops. This will go a long way to ensuring retailers are optimising the demand during peak periods, and developing and retaining loyal customers by offering them the chance to experience the brand, rather than focusing on online.
Sustainability is key in the Golden Quarter
An extended peak should not mean that retailers lose best practice and forget sustainability. We recently partnered with MIT on their State of Supply Chain Sustainability report and that revealed a dramatic move away from sustainability initiatives across the retail, manufacturing and logistics sectors as businesses were more concerned with restoring their operations to pre-pandemic levels and less on sustainability. But now, and going forward, retailers need to be incorporating sustainability within their supply chains.
Pressure is increasing from governments, regulatory bodies and crucially – consumers. As retail continues to grow, this pressure will too. AI and machine learning (ML) has the power to reduce supply chains environmental impact and waste whilst improving efficiency and customer experience. This benefits retailers as it introduces efficiencies into the supply chain, and supports them to attract and retain customers and investors who prefer to support sustainable retailing.
Driving demand in the Golden Quarter
An extended peak period should be seen as an opportunity for retail. Moving forward, retailers must make the most of the increased demand. To do this, they must offer customers the best experience and ability to shop through convenient channels.
By enhancing the omnichannel experience, increasing the presence of the store and focusing on sustainability and efficiencies within the supply chain, retailers will be able to drive this demand throughout the whole period. This is an exciting time for retail, and businesses need to make the most out of the shifting consumer behaviours. This is where technology comes into its own and it’s where we will see retailers thrive.
Credit: Wayne Snyder, VP Retail Strategy, Blue Yonder.