This golden quarter is shaping up to be unlike any other, especially with Black Friday and Christmas making these months so critical for the entire retail sector. The economic strains of 2023 have seen stubbornly high inflation, concerning interest rate rises, eyewatering energy prices and continued supply chain woes. Not forgetting that this is all precariously balanced on the shoulders of consumers with significantly less disposable income, thanks to a cost-of-living crisis, meaning retailers are really having to fight for every pound spent.
This is the first peak season where all of these macro-economic factors have culminated at once, making it unpredictable, to say the least. Not only is this peak going to be a test of retailer’s internal systems, supply chains, sales forecasts and overall resilience, it will be an acid test for consumer confidence, which could potentially provide some signalling of what the economic outlook for the next year may look like.
So how can retailers work smartly to make a successful Golden Quarter? Having a strong brand and product proposition is always key, supported by attracting customers through effective marketing strategies, all underpinned by secure multi-channel trading systems.
We know your plans for a prosperous peak are well underway and while there’s no silver bullet to ensure success, we share a few last-minute tips to help retailers tackle the Golden Quarter as efficiently as possible:
1- Attract Customers Through a Bit of Christmas Cheer
Still reeling from the impact of a global pandemic and lockdown life, combined with multiple wars disrupting supply chains, a climate crisis, high inflation and cost-of-living concerns, and it’s fair to say the world looks a little gloomy right now. But Christmas is a time where consumers want to get lost in the magic of the season, so this year provide escapism to solidify brand loyalty.
The importance of the physical store remains a critical part of every retailers delivery strategy. Absorb the Christmas atmosphere, embed it into your physical and virtual presence, making sure every customer visit is a happy & memorable experience. You just need to look to the master’s of the art like Harrod’s, Selfridges and Fortnum & Mason’s festive displays, to see how Christmas cheer and branding make a tangible difference to mood, footfall and crucially trading performance. Online, offer that memorable experience by using personalisation technology to better understand individual customers, and serve them accordingly. For loyal shoppers, offer little acts of kindness such as free delivery or a surprise gift, to reward them for spending their hard-earned money with you, it doesn’t go un-noticed and loyalty is worth the effort.
2- Revenue Diversification
Over the last year, more and more retailers have been developing own-brand products to reinvent their assortment and value proposition to improve margin. Now is the time to really let those products shine and encourage customers to try out something a bit different, in the hope that they keep buying that own-brand label throughout 2024 and beyond.
Equally, in a worrying time for the balance sheet, subscription services are making a comeback. Just take a look at Pets At Home which is combining product and services as part of its medium-term strategic vision announced in its record financial results earlier this year. Using its app, shoppers can book veterinary appointments, order repeat prescription deliveries and manage nutrition subscriptions, all in one convenient place.
The retailer understands the importance of having that consistent and repeated cash hitting the P&L, while customers can plan their finances more efficiently. Just make sure it’s what shoppers truly need, so it’s not the first direct debit to get cancelled when wallets tighten. So when that customer comes in to look for a stocking filler for Mr Meowington, just make sure that you share that a discounted subscription is also offered for the day-to-day essentials at the same time.
3- Improve Cost-efficiency
The main way to improve cost efficiency and protect profitability is to reduce business costs to cope with external pressures. You can start with streamlining processes with the use of process insight tools like Signavio, then use ‘process automation’ where the Signavio report shows you how you can improve your business and where you can benefit the most. Also consider a technology platform to boost innovation and democratise coding as well as getting the business departments involved in supporting your competitiveness. It’s not just the IT department that can develop apps to boost your differentiation, or turbo boost important processes you identify. Low code/no code solutions such as SAP’s Business Technology Platform (BTP) which allows retailers to be agile and accelerate innovation, even if the big technology transformation project is still underway – integrate existing applications, dabble in AI, and create useful apps, automate processes and design business sites with drag-and-drop simplicity.
Take the great British retail Icon Harrods. The 174-year old department store was looking to modernise its approach to integration and is using SAP Integration Suite on SAP Business Technology Platform, to connect both cloud and on-premise technologies, whilst simplifying it’s technical landscape, to ease communications and transactions with technology partners. By connecting several systems and vendors across myriad technologies, this helps Harrods address integration challenges and become more flexible to meet the fast-changing business needs – especially during peak season.
And talking of external pressures, when it comes to Black Friday, keeping an eye on competitors will be essential. But having intelligent software will allow retailers to implement smart pricing and promotions, to get the business through the period selling successfully whilst maintaining as much margin as possible.
4- Look After Your Workforce
Tis the season for the ‘Christmas temp’ and last November there were nearly 28,000 jobs available across the UK, according to job search engine Adzuna. That’s a lot of additional people to keep contented, meaning HR systems are critical to manage the extended team. Use AI like SAP’s virtual assistant Joule to sift through CVs or find the right internal talent, whilst making sure to take the time to ensure contracts are up to scratch, training is simple and effective, and complex shift patterns are easy to navigate. Why are you doing this, because at the end of the day, a happy workforce will drive better customer experience, and be more successful at selling during the busiest time of year.
5- Make Sure your ESG Strategy is Up to Scratch
This year, customers will be scrutinising prices and value for money like never before meaning they will spend more time assessing brands to make informed decisions rather than last minute panic buys that no one actually needs. The more time spent with a brand the more opportunities there are to surface ESG endeavours – tell the story of a fair supply chain or the net zero and green endeavours the business is making to future proof the planet – this is the time of year all eyes will be on retail, so make it count.