For retail brands, December is the Super Bowl, the World Cup, the final episode of The Voice. It’s when red becomes black in the ledger and the start of a very merry celebration… hopefully.
That’s because on average, most US retailers don’t see an annual profit until December 23rd. While this shouldn’t be taken literally, it does give brands important insight. It illustrates how retail revenue versus costs have a relatively slip profit margin when evenly distributed across a calendar year, and that ending with a strong holiday season is key to higher profits.
In fact, according to the National Retail Federation, “holiday sales in November and December have averaged about 19% of total retail sales over the last five years, but the figure can be higher for some retailers.” When one shopping season represents a fifth of the total revenue or more, you know it’s definitely the most important shopping season.
The ROI of your holiday sales is higher than at any other time of the year. NRF went on to say that the sales during the holiday season are often more profitable because “the increased volume of purchases comes without significantly increasing retailers’ fixed costs of doing business.”
Nevertheless, the current economic landscape does play a role in this story. Current reports from the US Commerce Department are so far showing lackluster numbers, with retail spending down 0.6% in November compared to October. If inflation is indeed curbing some consumer spending as reports indicate, your retail brand has to try harder than ever to make sure your sales are headed for a strong finish.
So how can you make the most of the remaining shopping days in December, heading into January? Here are three ways your retail brand can dominate this holiday shopping season.
1. Mine CRM Data from Last Year
Brands looking for ROI wins should try to market products that not only have a high profit margin, but also have proven to be popular sellers. Dive into your CRM to analyze data from November and December of last year to gain actionable insights as to what product categories may move best.
The retail analytics in your CRM can help you optimize your holiday sales endeavors, including:
- What product categories sold the best in the days leading up to Christmas
- What products were purchased as gifts to give, rather than to the shopper
- What product bundles could help upsell items to increase average order value
- What top product categories should be displayed in store windows to increase foot traffic
- What products can be loss leaders to drive traffic
- What promotional messages converted the best
Keep in mind, even moving the needle a percentage or two in a positive direction means much higher revenue due to the increased traffic and spending during the holiday season. Make sure your team is finding all the low-hanging fruit in last season’s data to find quick wins that can make the difference.
2. Use Data-Informed Communications
Your CRM data not only tells you what products to push, but how to push them as well. For example, 74% of Gen Z shoppers get their shopping ideas from social media channels like Tik Tok, while the majority of older shoppers (aka Boomers) are not affected by social media at all for shopping ideas. By analyzing your omnichannel retail communication strategy in recent weeks, your team can tell where certain segments of your audience are engaging with your brand, and thus, the right communications to send out.
For example, ettitude increased their sales over various holidays by 300% by using data-informed email and SMS campaigns, segmenting out their audience by zip codes and purchase history. This targeted consumers who were local to certain stores and pop-ups, who had a vested interest in the current products they were trying to push.
Similarly, your brand can send targeted promotional messages to customers within a 5 mile radius of your locations, and increase holiday foot traffic by offering in-store-only discounts on relevant products from their purchase history. This limits the amount of messaging your team has to push, increasing efficiency and ROI, while bringing in just the motivated shoppers.
3. Get Hyper-Personalized with your Clienteling
According to Adobe’s research, 72% of consumers say that they trust brands less when they receive poor personalization. So while customers are savvy enough to know what you are marketing to them, they still appreciate and respond better to more personalized promotions, emails, text, and ads.
And to really sell more as the holiday season wanes, lead with personalization. Or better yet, hyper-personalization, the ability to provide customized experiences that are data-driven to individual customers, delivered at the right time & through the right channels. Studies show that retailers can see 40% more revenue by getting specific with your marketing.
A great example of hyper-personalization in action can be seen through ettitude, a sustainable lifestyle brand that delivers silky-soft luxury bedding, sleepwear and other home essentials directly to its customers. By using the tools of Endear, they were able to increase sales 300% month-over-month as associates ramped up their outreach to customers.
Personalization is sending an email with some general holiday gift ideas they might like. Hyper-personalization is sending a Story with 3-5 products in their size, in their style, in the colors they love. All of this personalization can be mined through your CRM data, and team members can create and send a Shoppable Story either one-by-one to specific customers, or to groups of similar customers using automated segmentation. All these features are built into Endear to help your team do more with less, especially during the holiday season.
The most important shopping days are still ahead of us, not to mention the busy January shopping to come (can you say “returns” and “upselling”?). It’s not too late to leverage Endear’s CRM to find the low-hanging fruit that can take your holiday sales to the next level in 2022 and beyond.