Here’s Why CEOs Should Pay Attention to Festive Shopping Trends
The festive shopping season is in full swing and for retailers the potential rewards have never been higher.
Of course, consumer facing businesses can talk the talk when it comes to embracing new technologies and innovative ideas, but many then struggle putting this into practice.
Below Kees Jacobs, Vice President, Global Consumer Products and Retail Sector at Capgemini, explains that where to invest, which strategy to prioritize, and how to create a sustainable and cost-effective operating model are key concerns for retail CEOs as we enter the peak period and plan for 2020.
Fortunately, trends can provide essential insight into making the right decisions around this time of year, and many of these trends translate into learnings which can be utilized across multiple industries.
We spoke to almost 7,000 consumers across the US, UK, France, Germany and Spain to understand their expectations of retailers during the festive season – and unearthed some major lessons that all CEOs can learn from this year’s festive shopping trends:
Lesson 1 – Deliver the basics to allow new projects to meet their full potential
With increasing pressure to rapidly drive forward innovation while investing in new projects and products, it can be easy to let the tactics dictate the strategy. CEOs need to ensure their businesses are getting the basics of customer satisfaction right in order to provide a foundation that will support the business’ more innovate objectives and approaches.
Of the consumers we spoke to, it was clear that the basics were still the most important influence on which retailer they choose to shop with. For example, when we took cost out of the equation, consumers considered variety/range of stock available (34%) and convenience of an outlet’s location (21%) as the two top factors when choosing one retailer over another.
Across all industries, technology is increasingly critical to being able to meet these basics – the right supply chain and distribution solutions are the building blocks of most successful organizations, for example. It’s only once the basics of availability and supply are solved that innovative customer experiences can pay dividends.
Lesson 2 – Know your business from supply chain to shelf
While mastering the basics is key, the concept of what we consider to be a ‘basic’ is rapidly changing. Another key finding from our research was the way in which growing environmental concerns are starting to impact consumer behaviour dramatically.
We asked consumers where they would like retailers to prioritize investment this year. While maintaining or reducing price levels was the most popular response (33%), a notable 21% wanted retailers to invest in making their products/packaging more environmentally friendly. This number was highest in the UK, where almost a third (29%) of consumers felt that way.
For many businesses, this isn’t as simple as it seems – it can often require a top-to-bottom evaluation of their supply chain, identifying and acting on issues. However, for those businesses which can achieve success in this area, capturing an increasingly environmentally conscious consumer market could be a lucrative reward.
Lesson 3 – Leverage market-by-market insight to deliver a targeted experience
While it may seem like common sense, it remains the case that organizations who are able to identify and cater to their target consumers see greater success.
For example, our research found that younger shoppers showed greater demand for new technology than older shoppers. Among 18-24-year olds, there is a much higher demand for automated check-outs (27% said it would improve their shopping experience compared to the global average of 16%), and innovative technologies like VR mirrors in-store (24% vs. global average of 15%). This was also true of the most cutting-edge technology as 17% of 18–24-year olds were interested in drone delivery compared to 10% of all age groups.
There were also key differences at a territory level. As previously discussed, the UK showed the highest interest in sustainable products and packaging, while Spanish respondents led the way on demands for same day home delivery (41% of respondents claimed it would improve the experience compared to an average of 27%).
It goes without saying that a thorough understanding of your customer base is imperative when it comes to making investment decisions. However, never neglect the opportunity to increase your penetration in the right areas. For example, the under 35s are set to lead the festive spending spree with 40% set to spend more on their holiday shopping in 2019 compared to last year. Retailers who can identify how and where they appeal to this market, stand to see the greatest rewards.
It goes without saying that a thorough understanding of your customer base is imperative when it comes to making investment decisions.
Understand your customer, and leverage technology to deliver
The festive season remains the key battleground for retailers, and those CEOs who take time to study and understand the consumer landscape will continue to see the best results. As increasingly educated and digitally savvy consumers want companies to deliver a customized, transparent product, using market insight to your advantage is one clear way to ensure the end of 2019 is full of festive cheer.