Learn Lessons From Last Year

Learning Objectives

After completing this unit, you’ll be able to:

• Explain the benefit of a holiday retrospective.
  
• List three key changing holiday dynamics.
  
• Explain trends in shopper engagement.
  
• Describe the shift from in-store to online.
  

Introduction

The holiday shopping season is about to begin—and inflation is creating uncertainty about what to expect from consumers this year. This ambiguity is all the more reason to plan ahead to maximize the holiday season. The first step: begin your holiday planning with a look back at the previous year. A retrospective helps:

• Frame success metrics
  
• Identify new or continuous patterns of behavior
  
• Identify opportunities for improvement
  

By the Numbers

Let’s start by taking a look at last year’s shopping trends by the numbers. At Salesforce, we have access to the shopping data from over 1 billion shoppers, making over 1 billion visits to sites across 30 countries. This data provides a unique view of consumer trends.

During the 2021 holiday season, it was clear that certain online shopping dynamics were rapidly changing.

• Delivery options: Shoppers bought online and picked up in store or curbside
  
• Digital shopping: Higher percentage of revenue was digital rather than in a physical store
  
• Alternate payment methods: Digital wallets and alternative financing tools helped mitigate financial and health uncertainty
  
• Social: Increased online shopping visits from social referred channels
  
• Loyalty: Shoppers were  more likely to buy from a brand with a loyalty program and good customer service
  

A Digital Holiday Shopping Season

By all accounts, the 2021 holiday shopping season made history. With consumers kicking off holiday shopping early, digital commerce revenue rose 18% in the United States and 8% globally year-over-year (YoY). Consumers spent a record $1.14 trillion online worldwide and $257 billion in the U.S., compared to $1.1 trillion and $236 billion in 2020. In short, demand for online shopping, and an integrated store experience, is here to stay.

Buy Online Pick Up In Store (BOPIS)

BOPIS and curbside pickup have proven to be valued conveniences for consumers. These fulfillment options also helped customers combat shipping delays during the holiday season, enabling them to shop later in the month, yet still get their items on time.

U.S. retailers that offered BOPIS or click-and-collect options during the 2021 holiday season increased digital revenue by 40% on average YOY. In fact, 74% of retailers reported that shoppers bought at least one more product while in the store to pick up a purchase. Ultimately, BOPIS helped brands differentiate themselves by providing value-added services even after a customer's initial purchase. 

The lesson: Shoppers want choices when it comes to fulfillment. Since consumers still face a sluggish supply chain, brands that offer BOPIS and curbside pickup options this upcoming holiday season will win share-of-wallet.

Acquisitions on Social and New Platforms

The combination of lockdowns during the pandemic and digital natives coming into more buying power has resulted in the wide adoption of shopping through social media. Consumers increasingly turn to Instagram, TikTok, and other digital channels to discover new brands and products. Today, over 66% of shoppers prefer online shopping compared to offline. Social is the new marketplace for shoppers to browse and buy, and has become an essential part of creating a unified shopping experience. 

Social also acts as an equalizer, allowing smaller players to tap into niche audiences, gain followings, and increase their online revenue. Studies show that approximately 50% of all internet users in the APAC region have purchased at least one product through a social media platform. The rise of social commerce is a global trend that is here to stay.

The lesson: Social is a fast growing preferred medium for commerce. Include it in your omnichannel marketing strategy this holiday season.

Digital Wallets and Alternative Forms of Payment

Customers want to shop with ease, especially during the holiday season, and companies are reacting in order to win their business. As a result, mobile wallets and other alternative payment methods have become widely used. Research shows 64% of companies already offer at least one mobile wallet option. The convenience of mobile checkout is quickly becoming the standard for shoppers. The ability to checkout with as few clicks as necessary is a key convenience. When customers can checkout without having to enter their shipping and billing information for each purchase, they can focus more on finding the right products. 

The lesson: Brands need to be agile and embrace digital solutions that help them stay current as customers’ payment preferences evolve. Make sure your commerce platform makes it easy to provide new payment types.

Brand Loyalty

Customer loyalty is more important than ever as shoppers reevaluate their brand relationships. Seventy-eight percent of consumers are more likely to buy from a brand with a loyalty program. To do this, try going beyond discounts and award point systems — and instead focus on creating unique experiences that make shoppers feel special and valued. Some effective tactics include granting early access to new product releases and sales, exclusive events, and providing upgraded shipping. Millennials and Gen Zers particularly value exclusive access to limited products and experiences — at a rate of nearly two times more than Gen X and Baby Boomers.

Customers who were once loyal have turned to new brands. Seventy-three percent of shoppers that have ventured out to try new brands plan to stick with them. It’s vital to convert all of those new customers into loyal shoppers. To create an effective loyalty program, use the data that your shoppers share with you and reward them with great experiences that will keep them coming back. Brands have even re-envisioned the checkout process to include features for loyalty members. Fifty-one percent of organizations offer loyalty points as a form of payment at checkout, with digital leaders being two times more likely to have already invested.

The lesson: To drive loyalty, you need to know what makes your shoppers tick. And that requires data. Gather insights from commerce, marketing, sales, and service to uncover the bestways to create personalized shopping experiences and keep your customers coming back. 

2021 Milestones and Records

Key insights from last year’s holiday shopping season:

• Digital sales surpassed $1 trillion
  
• 24% of holiday sales occured in November
  
• Consumers turned to financing options to afford holiday shopping
  
• Holiday shipping cut off dates prompted shoppers to buy quickly — leading to a  4% increase YoY globally and 8% in the U.S.
  

Plan a Team Retrospective

Although the 2022 holiday shopping season will certainly be different, it’s still important to understand last year’s trends, because many of them are likely here to stay. Reviewing Salesforce data and insights is a great way to prepare for the upcoming holiday season, but you should also evaluate your unique storefront experience. Meet with your team to review these questions and gain different perspectives about last year’s performance, as well as a fresh look at new ideas. 

• What didn’t work during the holiday season?
  
• Which campaign and promotional tactics were successful?
  
• How can you align online experiences with offline or in-store experiences?
  
• What can you do differently with merchandising, marketing, functionality, or retail ops?
  
• Which metrics can you use to determine holiday merchandising improvements?
  

Next Steps

Holiday shopping and timing dynamics are ever-changing. We learned a lot from looking back. We learned that online shopping is more prevalent than ever, and that shoppers are increasingly relying on social media to discover new brands, browse products, and make purchases. 

We’ve also learned that shoppers appreciate BOPIS and curbside pick-up, as well as digital wallets and alternative payment options that help them finance their purchases. Finally, we’ve learned that building brand loyalty is key, and one effective way to do so is by creating unique experiences that make your shoppers feel special and valued. 

With these insights and your company’s unique perspective, let’s learn how to strategize holiday promotions.

Resources

• Salesforce: The New Holiday Retail Planning Guide
• Salesforce: Doing More With Less This Holiday Season? AI Retail Merchandising Can Help
• Salesforce: The Holidays Will Be Different This Year — Here’s How To Measure Your Ecommerce Success