The winter holiday shopping season is typically critical to a retailer’s yearly financial performance. According to the National Retail Federation (NRF), November and December holiday sales have averaged approximately 19% of total annual retail sales over the last five years. Some retailers, however, generate an even higher percentage of their total annual sales during this time.
With the COVID-19 pandemic still impacting consumer behavior and spending power, it’s clear that this year’s holiday shopping season will be different. Online shopping has boomed and is expected to play an important role in this year’s holiday purchases. The shopping season is also expected to last longer. NRF launched a campaign that urges shoppers to begin their shopping earlier to avoid large crowds.
Retailers who have struggled to generate revenue in 2020 need strong sales now more than ever. But how? And with the emphasis on online sales, do stores even matter this year?
Despite the pandemic, stores are expected to remain an important sales channel for many consumers. Store traffic may decline compared to previous years but that doesn’t mean that retailers can ignore their brick-and-mortar strategy. To maximize sales during this crucial window of opportunity, retailers need to monitor trends closely and be ready to adjust strategies if needed.
That said, shifting strategies in the middle of the biggest retail event of the year is easier said than done. Some things simply can’t be changed in time. In those instances, retailers can use insights from this time to be better prepared for the new year.
How to Monitor Store Trends: The Role of Location Analytics
Retail management teams will undoubtedly be keeping a close eye on daily sales reports, but they may also find a new ally in location analytics.
Location analytics tools use deidentified GPS data from consumer mobile devices to report on the types of consumers visiting an area as well as on traffic trends. Consider using the technology to answer questions such as the following:
- Is foot traffic at the store consistent with levels seen in the prior year? If not, how much has it changed? Keep in mind that some foot traffic may come from consumers who chose to purchase online but pick up in store to avoid shipping fees. This data can provide complementary insights when reviewing sales figures.
- How do the volume trends at your store compare to the volume trends in its host shopping center? If you are seeing a decline in traffic at your store but the shopping center traffic is remaining consistent, then are you making up for the difference in online sales from consumers in the store’s trade area? If not, it may be a signal to dig deeper to see if there’s anything that needs to be adjusted in order to capture consumer interest.
- How do the volume trends at your stores compare to volume trends at competitor locations? These insights can help you to benchmark and better interpret your own sales performance.
- Are the same types of consumers visiting your stores as in past holiday shopping seasons? If not, consider arming your store management and marketing teams with insights on your new key consumer base. Perhaps the insights can be used to inform promotional placements within the store or to adjust digital marketing campaigns, which may be revised faster than traditional advertising campaigns.
The Bottom Line
The 2020 holiday shopping season presents retailers with a unique opportunity to study what consumer behavior is like today. Retailers who keep a close eye on the data, pivot when possible, and use the findings to inform strategy as we enter 2021 will be better positioned to generate crucial revenue now and going forward.