Holiday season preparedness: How the brick & mortar industry can optimize their retail operations now for the holiday season

Brick & mortar recovery from the pandemic is well underway. Despite an initial hit to the sector and rise in e-commerce sales, physical stores are bouncing back. E-commerce has undoubtedly gained momentum in recent years, with an increasing percentage of total sales (excluding restaurants, motor vehicles and gasoline sales) of 19.6% in 2019, up from 9.6% in 2009, and up to a pandemic high of 25.5% in April 2020. Yet, e-commerce sales have retreated over the last 10 months and have begun going back to pre-pandemic levels. In December 2020, e-commerce sales had already dipped back to 21.3%, and the e-commerce share of sales is now only 2.0 percentage points above its trend since 2014. The brick & mortar retail industry has returned.

Brand leaders in the brick & mortar retail industry are naturally optimistic looking ahead, including to the critical holiday season around the corner. With consumer spending highly concentrated between November and January, developing a strategy for engaging consumers, fostering an impactful customer experience, and maximizing sales will be critical to driving revenue and recovery from the last year and half. And consumer spending is set to soar. On top of the $1.19 trillion spent in US retail sales between November 2020 and January 2021, Deloitte is forecasting a 7% to 9% increase in sales this year over the same holiday period last year due to increasing vaccination rates and continued strong savings from over the pandemic that will support consumer spending and keep retail sales elevated.

The three days predicted to be the busiest for the upcoming holiday season in the U.S. will be Black Friday (November 26), Super Saturday (December 18) and the Thursday before Christmas (December 23). At the same time, many consumers may start their shopping earlier to offset inventory limitations, shipping delays and ongoing concerns about social distancing. Which means retailers looking to maximize store performance going into the busiest shopping season of the year need to plan now to optimize their retail operations.

While consumer behaviour continues to evolve with recovery, recent Forrester research has shown a split in time spent in store – “six in 10 ‘Thrifty’ consumers, who perceive minimal risk to their physical well-being and are driven by cost savings, are spending more time shopping in stores, while ‘Cocooned’ consumers, who wield their wallets to protect their physical exposure, are spending less time in stores. 64% of “Cocooned” consumers are trying to avoid stores altogether.” That split makes a targeted holiday strategy even more critical.

When building out a holiday strategy for 2021, retailers should focus on four foundational elements to optimize their stores and strengthen performance:

1. Collect and analyze data: Data is power, and data is all around. The amount of in-store data available to retailers today is abundant, and retail management platform Optimum Retailing (OR) provides brick & mortar retailers with a powerful solution that incorporates store data around design, construction, inventory, and size of fixtures with third party software and insights, while integrating with business platforms such as SAP and Oracle. With OR, retailers are empowered to truly optimize merchandising and promotions. The power of the OR platform is rooted in building data-driven store-specific profiles using advanced tools to collect and analyze multiple sources of data, allowing users to gain AI-driven behavioral-based insights into each store.
2. Plan with intelligence and localize go-to-market strategies: Management teams that have full visibility into their stores can take an informed approach to strategizing, planning, and executing at the local level. Having accurate store-specific information, local data, and a dedicated communication platform allows retail leaders to understand why and how each store is unique. With those insights, brick & mortar retailers can localize and personalize products, messages, and campaigns accordingly, and allocate a messaging hierarchy to each store that they can be confident will resonate with local customers.
3. Smarter utilization of resources and the frontline: OR’s workforce management feature is transforming the way retailers plan and execute at the store level by providing powerful insights that increase productivity and reduce non-sellable hours. With visibility into how frontline staff are currently spending hours and what the breakdown is between sellable and non-sellable hours, OR’s clients are making smarter, more informed decisions around who should work when and what tasks and activities they should prioritize. At the same time, store managers can accurately determine staffing requirements needed for upcoming campaigns to avoid being under or overstaffed. OR also makes life easier for the frontline – with features such as Automated Photo Compliance (APC), employees simply hold up their smartphone to a fixture and AI does the work in ensuring stores are compliant, which can mean greater conversion rates over the holidays and improved store performance.
4. Find operational efficiencies that free up time and resource. In today’s world, many retailers are focused on speed to market, but without proper planning it can comes at a price. With OR, staff make fewer mistakes, everyone from planning to execution works more efficiently, and only what’s needed is printed and sent to stores, creating less waste. Retail operations become more efficient and store performance goes up. In the first 12 months alone, OR’s client see a 20-30% reduction in non-selling hours, providing near immediate benefits.

The brick & mortar industry has proven to be resilient, and the future looks bright. With retail sales expected to grow year-over-year by a sizeable amount in 2021, brick & mortar retailers have reason to be optimistic. Yet, they need to start preparing now to optimize stores, and develop a foundational strategy that reflects a still fluctuating consumer economy and ever evolving consumer behaviour trends. With a focus on retail data and retail analytics, localized strategy, workforce management, and finding operational and resource efficiencies, OR makes it easy for brick & mortar retailers to maximize opportunities and revenue this holiday season.

Now is the time to optimize retail operations and do more with OR.