Melissa Dean, Partner – National Retail, Wholesale and Distribution Sector Lead, Deloitte Australia
The newly released 2022 Deloitte Retailers’ Holiday Survey shows retailers are (cautiously) optimistic that consumers are ready to embrace holiday spending this Christmas season.
While 10 years ago most spending occurred in early December, Christmas now comes earlier than ever and truly kicks off at the start of November, with consumers emerging from their living room caves post-pandemic lockdowns and finally shopping in stores. In-person experiences are top of mind after two holiday seasons of an isolated existence, and consumers are seeking immediate gratification and magical brand interactions through store visits. The industry is now finding a new balance between clicks and bricks, with 45% of retailers expecting online sales above 10% compared to 55% is 2021³, as consumers return to stores.
The return of in-person shopping is expected to follow the return to offices, with real estate vacancy pressures already easing in H1 for Sydney’s CBD. Across Australia CBD’s, more retailers should make it home for Christmas.¹
Overseas, the economic value in the physical store experience is equally recognised by regulators and governments, as they boldly consider measures like an online sales tax to influence a shift away from online purchases². Is this retail resistance against the ‘new’ way of life, or are we striving for a balance that straddles both ‘old’ and ‘new’ worlds?
As connectivity is driving customers back to stores, supply chain challenges persist, affecting delivery guarantees for the Christmas season. However, the brands that can interact with the customer at their channel of choice is how retailers will succeed this Christmas.
As businesses’ supply chains around the world were disrupted, new solution strategies were triggered. Yet, with new resiliency measures in place, retailers are optimistic with 58% either somewhat or very confident in their ability to meet stock demands this holiday season – up from just 29% in 2021³. Inventory stock solutions will need continuous revision to mitigate supply delivery threats and keep this confidence steady. As the holiday season approaches, even Australia Post has warned consumers of the unreliability of last-minute online shopping and are encouraging Australians to start their ‘silly season’ early or choose expedited delivery options wisely. They’re also urging consumers to reconsider their purchasing methods, thus driving them to stores – what better way to ensure Santa’s gifts arrive on time?
With all these factors in play, it’s clear that in-store is in vogue this Christmas but, through the past two years, consumers have accelerated into a newly matured digital context. A fluid online-to-offline experience delivering convenience, pace, visibility, brand connection and a seamless transition from phones to physical are bare minimum expectations. Shoppers who interact with multiple channel touchpoints are a brand’s most valuable customer with higher purchase rates and retailers are being put to the test to address the true meaning of omni-presence to capture consumers hearts and wallets.
This year, 61% of those surveyed³ were investing in building omni-presence between online and in-store to reap the benefits of providing seamless customer experience. An opportunity to take the next step in the omnichannel journey, retailers need to be prepared to make their store comeback count at the most important time of year.
By accompanying customers along their journey and adapting to their shifting needs, retailers will be well-placed for a strong holiday period and beyond.” – Melissa Dean, Deloitte Australia Partner – National Retail, Wholesale & Distribution Lead.
Five strategies for driving a successful holiday sales season
1. Ambient retail – Retail is everywhere. The opportunity to create desire and purchase gateways is all around us whether through brick-and-mortar stores, QR code links to online, direct social media channels or affiliate programs, or through the Metaverse, retail’s new dimension.
As a bridge between physical and digital worlds, the Metaverse extends the customers journey with ‘phygital’ objects – physical objects with digital features such as augmented reality (AR) capabilities and Near Field Communication (NFC). Enabling near limitless creations, AR allows consumers to visualise and virtually customise products with ease, enhancing the customer experience while creating certainty of purchase, boosting conversions, and lowering the return rate. As the Metaverse develops, brands that make their mark early will see best returns on investment, through established audience and community.
Taking advantage of every possible exposure opportunity to reinforce brand credibility and purchase moments will be key to succeeding this Christmas.
2. Make channels count or don’t count them at all – Purposeful as opposed to placeholder presence is important to create meaningful, authentic multiple touchpoints. Whichever channel is chosen needs a uniqueness of its own to truly engage.
3. Seamless experiences – Create an experience link between your online and offline world whether in services, insights and information or product demonstration. Building customer confidence and trust in your brand is imperative. This also relates to the safety consumers must feel when making a purchase whether in-stores or online. Data and identity security need to be top of mind.
4. Value loyalty and prioritise personalisation – Loyalty programs that seamlessly bridge channels strengthen brand to consumer connection through well-known reward schemes encouraging repeat purchase behaviour. Loyalty programs also create additional, high impact touchpoints for greater customer understanding and value delivery improvement. Having a single customer view allows you to know your customer, and is your greatest strength in delivering excellence through personalisation, driving higher value business outcomes.
5. Review your omni-presence inventory management – cloud-based systems can effectively underpin multi-channel selling. They allow for a seamless shopping experience by efficiently supporting retailers with real-time visibility of stock quantities and locations, inventory syncing and integration, tracking, reporting, forecasting, customer, vendor management and more.
1 Emma Simpson, M&S warns online sales tax will damage High Street, BBC, 19 May 2022
2 CBRE, Return to the Office Set to Drive CBD Retail Recovery, 19 August 2022
3 Deloitte Australia, 2022 Retailers’ Holiday Survey, 17 October 2022