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Just as each holiday season brings the newest gifts and gadgets on everyone’s wish list, it also brings new demands and business competition. Companies that stay ahead of trends and meet customer and market demands will win. This issue explores a handful of holiday business trends that impact the way business gets done, including digital disruption, fraud, customer experience, and more.
— David Niles, CEO of SSA & Company and President of G100 Companies
Increased online order volumes and the popularity of BOPIS shopping—combined with low unemployment—has many retailers and logistics operators scrambling to find holiday help. To cope, some companies have blended human workers with collaborative robots, or “cobots”. Cobots use cameras and sensors to help workers be more efficient by navigating warehouse aisles, leading them to the correct shelves, shuttling bins between workspaces, and lifting heavy objects. Aside from automation, retailers are battling the tight labor market by offering more incentives to attract workers. SSA & Company Managing Partner Matt Katz recently shared with CNN Business some strategies retailers employed this year to staff seasonal employees—ranging from pay raises and employee discounts to tuition reimbursements. As omnichannel continues growing, companies must execute workforce management and automation strategies that can meet demand and create customer delight without sacrificing profits.
This holiday season Home Depot and Kohl’s are leveraging Google’s AI technology to offer promotions, recommendations, and dynamic pricing in an effort to increase sales from online shoppers. AI and machine learning capabilities allow retailers to access strategies based on product price elasticity and avoid a race to the bottom, giving them a leg up on competitors. Although brick-and-mortar stores may not be able to take advantage of Google’s AI solutions, AI-powered IoT devices can help them by reinventing the busy holiday parking lot. Smart parking technology gathers information on available and occupied spaces in real-time, transmits it to guide drivers to a better experience, and informs retailers with data. Retailers that take advantage of the additional data points provided by AI and other emerging technologies to offer strategic customer benefits will stand out among competitors.
Consumers have more individual transactions during the holidays than any other time of year. While this is great for retailers, it can be bad news for banks. A new report found this increase in transactions can lead to a greater chance of fraud. This is because customer payment information is being distributed at a higher rate across multiple stores. Rather than blaming retailers for breaching their data, customers are more likely to blame their banks. 17% of consumers say that they would hold their bank solely responsible and nearly 1 in 5 say they would close all of their accounts if their data was compromised. To help mitigate the risk, banks should implement digital strategies (e.g., suspicious activity alerts, purchase notifications, frictionless transaction history search, etc.,) to help customers stay on top of their transactions and catch fraud before it’s too late.
Whether it’s one winter week in the US or an extended European version, insurtechs are providing holiday travelers with easier access to travel insurance. The updated version of traditional travel insurance utilizes analytics, machine learning, and AI—as well as users’ mobile connectivity and geo-location—to create products that offer real-time pricing and one-click customized policies. These advancements can help make travel insurance more appealing to customers through transparency, online quotes, instant claims, and engaging experience. Airlines and online travel agencies can use these technologies to develop and distribute their own protection products causing additional disruption with new market entrants.
Walmart exhibited impressive speed of innovation in its e-commerce overhaul and subsequent supply chain transformation in an attempt to keep up with Amazon’s Prime offerings. Recently, Walmart introduced a ‘Competitive Price Adjustment’ program on its online marketplace that temporarily lowers its prices on certain products. By subsidizing the price differences, Walmart gives up some revenue in return for increased sales. This is a response to Amazon’s introduction of “Sold by Amazon,” a program that uses price controls on products provided by third-party vendors. As Walmart builds new capabilities (e.g. home delivery out of its 1,400 stores) and pricing wars with Amazon heat up, execution will ultimately determine success. Winning requires the right products, well-displayed at competitive prices, organized in well-staffed stores, and enabled by technology and operations that drive customer delight across channels (website, mobile, BOPIS, etc.).
Cyber Monday officially surpassed Black Friday sales. The online shopping holiday broke a new sales record with consumers spending over $9 billion, with mobile-generated sales accounting for $3 billion of this total. Mobile shopping increased 46% from last year, a trend that will not change anytime soon. Yet, according to a recent study reported in Retail Dive, 52% of retailers feel ill-prepared to support emerging technologies like AI, Chatbots, and AR/VR to engage mobile shoppers. Obstacles to adopting mobile-based technologies include budget, internal resources, and executive buy-in. While mobile channels may represent half of sales for many retailers, mobile commerce continues to grow in importance and plays a hugely important role in the customer journey. 50% of shoppers in a physical store use online video to research that store’s product while shopping. To stay ahead, retailers will need to prioritize and sequence investments—balancing tradeoffs with choices that deliver the optimal customer experience.