What Should Retailers Expect from the Holidays This Year? How Can You be Prepared?
Retailers are in uncharted territory as we head into the 2020 holiday season.
If you’re like most retailers, there’s a good chance you’ve traditionally relied on historical data to provide some guidance in terms of what to expect and how to best serve customers. You could look to last year’s season and make some fairly-reliable projections as to how you should allocate resources. For 2020, though, the COVID-19 outbreak means that all bets are off.
The only thing we can really anticipate is the disruption of typical holiday shopping patterns. For instance, far fewer people are expected to do their shopping in-store this year, compared to last year’s season. This leaves retailers around the globe to ask: how will the pandemic really impact my operations and my bottom line this year?
Although the holidays are still a few months away, we need to start getting prepared now. Specifically, we need to examine the ways in which COVID-19 will interrupt business as usual.
What to Expect for the Holiday Season
First off, we’re going to see a major shift toward online shopping and ordering in the run-up to the 2020 holiday season. This shouldn’t come as a shock; according to a new study published by Retail Systems, we’ve already seen a 74% growth in online shopping since COVID-19 began. Nearly half of respondents to the study said they’ve received more parcel deliveries during the lockdown than ever before.
Of course, that activity doesn’t exist in a vacuum. The surge in online shopping correlates with a sharp drop in physical retail. Looking ahead, 60% of survey respondents say they plan to do less in-store shopping this season due to COVID-19 anxieties.
At the same time, although some behaviors are expected to shift, others should remain consistent. The majority of consumers surveyed report that they plan to spend about the same amount this year as in 2019.
Another survey by tech firm Radial finds that 41% of consumers don’t plan to start shopping any earlier for holiday gifts. 39% of respondents plan to begin their holiday shopping in October or early November. 30% say they’ll wait until Black Friday or Cyber Monday.
So, what does all this mean? In short, we shouldn’t expect any major increase in sales. While consumers are still going to spend plenty, they may be holding back a little due to economic uncertainty. Instead of “growing,” sales are merely shifting from one channel to another. That means there is more riding on your eCommerce and digital sales operations than ever before.
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What Your Customers Expect
You face the potential for substantial losses if you’re not optimized to handle a surge in online activity. Your holiday prep priorities may need to shift somewhat. For instance, the Retail Systems study found that more 81% of respondents expect accurate information about products that are in-stock at the time of browsing.
After inaccurate or outdated stock information, back-office errors and delays represented the second-biggest driver of customer dissatisfaction. These and other customer service missteps carry consequences even beyond the holidays: one-third of respondents reported that they’d stopped shopping with a retailer because of poor service.
So, is there any good news here? Well, you can take some comfort in the knowledge that your customers may be willing to cut you a little slack in terms of order fulfillment.
The number of consumers who expect the delivery of goods in two days or less declined from 35% in 2018 to just 14% in 2020. Furthermore, 50% of respondents say five days is a reasonable timeframe for delivery, while 28% were willing to wait up to one week for their goods. While expectations are still high, customers understand that COVID-19 is putting tremendous strain on fulfillment and delivery processes. As a result, they’re a little more forgiving than in the past.
Even with that added wiggle room, however, you still can’t afford to overlook opportunities to optimize processes wherever possible. With a litany of obstacles in your way at just about every stage, your digital operations must be set up to run as smoothly as possible. This includes conventional eCommerce, as well as shopping options like mobile ordering and click-and-collect.
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The Holiday Prep Checklist
You need to possess a thorough understanding of every facet of every shopping channel at every stage of the experience. This includes direct customer touchpoints, as well as backend processes. While this isn’t an exhaustive outline, the checklist below should offer some basic questions you must address before the holidays get underway:
- Messaging: Are you speaking effectively to customers? Is your messaging sensitive to buyers’ concerns, given the added stress of COVID-19?
- Navigation: Is your platform easy to search, navigate, and find the products for which customers are looking? Does it guide buyers seamlessly through the process?
- Inventory: Are your stock levels accurate? Can your inventory software keep up with the pace of transactions?
- Infrastructure: Can your platform withstand a surge in traffic without crashes or inconsistent service?
- Research: Have you conducted adequate research to determine customers’ buying preferences? Do you need to check supply chains before the holidays get underway?
- Customer Service: Is it easy for customers to get help if needed? Is live service available round-the-clock? Are you accessible via the phone, email, and social media?
- Security: Are you scanning transactions for fraud? Are your defenses up-to-date to defend against new and developing fraud tactics and other cyber threats?
- Follow-Up: Is it easy to return or exchange merchandise, if needed? Are you conducting post-transaction follow-ups to preserve and strengthen the customer relationship?
A thorough review of these processes before the holiday season gets underway is critical. Now is the time to identify and resolve potential hiccups and roadblocks. If you leave this vital work to the last minute, there’s a very good chance you’ll end up facing disruptions of service, angry customers, abandoned shopping carts, and ultimately, chargebacks.
Chargebacks, in particular, could prove to be a major problem this holiday season. Friendly fraud incidents more than doubled between January and June 2020, according to the recent LexisNexis Risk Solutions Cybercrime Report. These are unlikely to remain isolated incidents. Our data suggests that roughly 50% of cardholders who successfully commit friendly fraud will do it again within 90 days.
Seek Help Where Needed
If you identify shortcomings in your operations, one simple solution is to turn to a third-party provider for support. For instance, we’ve prepared a list of third-party call centers who can help provide overflow customer service support during the peak of the season.
And of course, to paraphrase an old saying, the best-laid plans often go awry. Even with the best, most comprehensive strategy in place, there’s a decent chance that you’ll experience chargebacks, especially in the weeks following the holidays: late January through early March are what we typically refer to as “chargeback season.”
If you need help managing these customer disputes, consider giving the experts at Chargebacks911® a call. We can manage your chargebacks, recover your revenue, and protect your bottom line, while you focus on doing what you do best: serving your customers.
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