IBM: How Retailers can Deliver Effective Marketing at Christmas

Christmas shopping is increasingly taking place online and click-and-collect is set to dominate consumer purchasing activity this Christmas, with retailers being warned to get their logistics houses in order to deal with the oncoming rush to pick up deliveries from the store.

The rise of click-and-collect is one example, but online retail is having far-reaching effects on consumer habits and behaviour across a variety of activities. How should marketers adapt to deal with this trend?

Every year we monitor the performance of hundreds of retail websites worldwide to gain insights into how shopping is evolving.

Over the years the results have demonstrated how seasonal events in the retail calendar, especially around Christmas, have grown to affect the behaviour of shoppers and retailers - with sales starting earlier in the year, Christmas holidays being used for shopping and practices such as Black Friday discounting arriving in the UK under the influence of online retail.

Shops which traditionally would have been closed over the Christmas Bank Holidays are now able to trade online and found a market of customers eager to shop. Sales and discounts which would have started in January now happen up to two months earlier.

Busy pre-Christmas shopping days have extended over a longer period, with customers taking advantage of early discounts to plan purchases but also relying on better delivery to buy right up to the last minute.

Couch Commerce on Christmas Day

Our research revealed how three years ago shopping actually became a de facto Christmas Day activity, with significant number of shoppers eschewing family interaction to log-on and indulge in ‘couch commerce’, spurred on by the perfect storm of 24/7 online retail, earlier sales and discounts and tablet computers being the gift of choice that year.

When it comes to shopping on a mobile device, attention metrics show that consumers have no patience for websites that crash, are slow or do not display check-out details or other information correctly. Whether they are logging on at home or in the store, on a tablet or a smartphone, shoppers will quickly give up trying to browse if not satisfied.

So a first step is knowing exactly on what device and where the shopper is, in order to provide the correct experience. While shoppers don’t think about whether they are responding to an email, asking queries on Twitter or profiting from an advertised discount, many marketers and businesses still have siloed mechanisms for dealing with each interaction.

Lost revenue occurs from the frustration created by this lack of alignment between business operations and customer expectation.

Christmas is a busy planning period for shoppers. So this is when digital marketing activities such as re-targeting and basket tracking come into their own for online retailers. Make it easy for a shopper to start a list, select items to be purchased and store them in a basket.

Uncompleted purchases and abandoned carts could be the result of a technical problem on a website or simply that the shopper has run out of time or attention. In order to save that revenue, plan for both contingencies, by making it possible to track interactions to identify failure points but also by keeping track of a shopper’s preferences and choices and reminding them when they log back in that the trolley is still full of selected items and gifts.

In the store, personalisation is another effective way to support shoppers and ease the planning of multiple purchases. Use behavioural and profiling data to identify which type of shopper has entered a store or is visiting a website. With the right technology, combined with external or historic data which the shopper has shared, this has now become easy to do.

Retailers could benefit highly from applying marketing as a service – by identifying the last-minute gift shopper, the cook responsible for a large family meal, the parent looking for the highly-prized seasonal toy, or the friend struggling to identify the most suitable present – by quickly and efficiently providing personalised and targeted suggestions on items, discounts and stock.

Online retail has had a serious effect on the Christmas retail season, which has forever been changed. While some retailers have vowed not to start sales and discounts as early this year, pressure still remains as years of recession continue to heighten shoppers’ price sensitivity.

Introduced by large online retailers and adopted by grocery chains the practice of Black Friday discounting looks set to stay.

Retailers must adapt to this new environment and marketing from a more holistic perspective is one way to start.