by Scott Zimmerman
As the credit card bills from Christmas arrive in the mail, you’d think people would tighten their belts in January. But post-holiday sales drew crowds back into department stores for further retail therapy. Forget the returns line, Americans hit the stores in a big way after Christmas to buy more stuff and indulge their retail appetite, which may have made 2010’s holiday shopping season one of the biggest ever. Armed with gift cards and eyeing a new crop of discounts, shoppers spent more on their family and friends, and for the first time since before the Great Recession, treated themselves and even their pets.
Reports from the National Retail Federation (NRF) showed that spending was strong since the start of the holiday shopping season in November and the momentum continued through post-Christmas sales. Holiday spending reached more than $451 billion, up 3.3% over last year. That is the biggest increase since 2006, and the largest total since a record $452.8 billion in 2007.
According to a survey by the International Council of Shopping Centers (ICSC) and Goldman Sachs Group, it worked. Forty-seven percent (47%) of U.S. consumers continued their shopping during the week between Christmas and New Year’s. And although a blizzard forced some East Coast malls to close the Sunday after Christmas, those that were open were much busier with new sales than with gift receipts. Based on a sampling of stores at a number of malls, 80% of the transactions were purchases, while returns and exchanges each accounted for 10%.
One way that retailers can ensure their post-holiday sales success is through a concept called Engagement Communications. Engagement Communications blends advances in communications such as voice mail, text messaging, e-mail and social media with a human touch. Together they create points of engagement with a customer rather than a simple connection. Making a connection might inform but it doesn’t necessarily motivate consumers to take action. Create engagement points and the path is opened up for activation — which in this case means returning to retail stores to spend more money.
Engagement Communications involves tailored and personalized campaign-based outreach, which encourages two-way dialogue to keep customers emotionally connected and coming back. While outgoing messages can be scaled to the hundreds and even thousands, each is delivered and experienced in a tailored and personalized manner.
For example, a retailer could utilize Engagement Communications technology to send an e-mail message to customers offering post-holiday discounts in their store or on their web site. These messages help impact bottom line profits especially since an increase in gift card sales mean many shoppers are actually buying their holiday gifts after the holidays.
Considering that 61% of shoppers spend more than the value of the gift card when redeeming, and 28% of shoppers make two or more visits to the store or web site to redeem the full value of the card, it benefits retailers greatly to get gift card recipients to redeem the cards as soon as possible. Retailers can engage those customers further by extending free shipping when they are redeeming gift cards and exchanging items. This will add to retailers’ brand loyalty and help increase sales.
Best sellers in November and December, such as toys, books and electronic entertainment, are most likely to be the key items that will continue to drive business after the holidays. A retailer could deliver text messages to shoppers to promote items that are similar to the ones they previously purchased. People typically give gifts that they like themselves, so retailers can use their purchase history data to build targeted Engagement Communications campaigns.
Knowing what customers want gives retailers the opportunity to send relevant and timely communications of store specials on those key items, which will engage customers in a meaningful way.
Imagine how appreciative a shopper would be to receive a text message indicating the arrival of a new shipment of electronics, or a friendly message to notify a shopper that an advertised special was no longer available in order to save him a trip into the store. Retailers also can save their customers time by using scarcity clauses on their web sites or social media pages warning shoppers when inventory levels are low, and give them an easy way to request notification when the item is back in stock. Doing so will help keep shopping cart abandonment rate low and your customers browsing and buying items that are in stock.
Today’s consumers expect, and in many cases demand, that information be tailored to their ever-changing needs and interests. By knowing what customers want and keeping them engaged throughout the purchasing process, retailers can deliver solutions that result in more sales and can position themselves for a profitable 2011.
Originally published in Retail TouchPoints, February 10, 2011