Holiday Shopping 2017: Who Will Win? And How?
The 2017 holiday shopping season is off to a roaring start. For the first time, experts project this year's digital sales will exceed $100 billion. According to Adobe Insights, since the season began on Nov. 1, online sales have surpassed a whopping $1 billion each day.
But the best news may be confined to a few key players. Who will win? And how?
Those who employ "whole season" dynamics
Digital shopping is still predominantly driven by higher income consumers, and retailers who most successfully address this audience will win the lion's share of the business.
Those who deploy scale in the holiday season's full-court press will lead the pack. "Whole season" dynamics are becoming more important for brands to manage.
In 2006, prior to smartphones, Cyber Monday produced 25 percent of the entire year's online sales, according to shop.org. Ten years later, mobile sales alone were worth more than the whole of Cyber Monday in 2006. Cyber Monday now accounts for less than 1 percent of the year's online sales.
While the holiday season is great for branding and messaging, strategies to build brand equity and sales throughout the year are increasingly vital.
Retailers who master "early, often and online"
This year we've seen an increase of bellwether retailers like Walmart, Target, Amazon, Macy's and Best Buy offering targeted discounts early in the season, particularly through online channels.
Retailers have mastered their overall holiday communications as they intentionally release Black Friday deals early and drip-feed customers with updates on their shipping and returns policies -- all of which prompts online store visits.
Five years ago, holiday inserts for retailers like Target, Walmart and Best Buy were a closely guarded secret. Stores feared giving away their best deals and being trumped by competitors. Today, retailers go to great pains to announce their offers -- knowing the reveal is often a newsworthy, traffic-generating event.
In the digital world, transparency and speed of response have become differentiators. Friction and secrecy used to be the retailer's friend, and sales spikes illustrated that. Now, with customers taking the lead in the digital world, friction and secrecy are the ultimate sales killers.
The early reveal of Black Friday deals also benefits sales in the early part of the season. Until recently, shoppers were wary of early-season bargains, expecting the best deals to be available over Black Friday weekend. Now shoppers can see the deals and compare them to early-season options, altering their plans accordingly.
Retailers have become better at understanding real-time data. They're aiming traffic to deals on their sites to get a pulse on which are garnering the most attention and from where. This helps ensure items are in stock and allows retailers to adjust pricing according to demand.
Those who leverage the value of partnerships
Another distinctive change this year is the role partnerships are playing in retail; those who will likely win this season have deep relationships in this area.
For years Best Buy has leveraged strong partnerships with consumer electronics brands like Samsung, LG and Apple. Today, Best Buy has a strong partnership with Amazon, that, until recently, was considered the ultimate existential threat. In Best Buy stores, consumers are seeing Amazon Alexa and Kindle installations. Jeff Bezos, Amazon's founder and CEO, even tweeted his congratulations to Best Buy for introducing its new Alexa skill.
Kohl's has begun accepting Amazon returns and without a doubt will see increases in traffic in the latter part of the season as a result. As recently as a couple of years ago, this would have been unthinkable. Now it is normal and appreciated by customers.
The purchase of Whole Foods cemented Amazon's position as the home for the nation's wealthiest and most digitally savvy customers.
Brands that only a year ago would have strenuously avoided Amazon are now partnering with the company directly and intentionally.
This year, Nike began to assort lines directly on Amazon, while Tuft and Needle (the mattress startup) created Amazon-powered showrooms.
Most recently, Calvin Klein announced holiday pop-ups powered by Amazon. The Calvin Klein X Amazon Fashion holiday retail experience includes pop-up shops in New York and Los Angeles, as well as an online brand store on Amazon called My Calvins.
The pop-ups feature customization stations to add personalization options like embroidery. Customers can make a purchase in-store by scanning a bar code in the Amazon app, or have their items delivered to their homes.
Fitting rooms feature Amazon Echo devices so shoppers can ask Alexa questions about Calvin Klein products, control the lighting and choose what music is playing.
Amazon, with its grip on the holiday shoppers' psyche and pockets, is now seen as a value-delivery platform for even the most exclusive brands. It promises to be a happy holiday for brands and retailers reaching their consumers directly and through new partnerships.