December’s core consumer price index was around 6.5%, and consumers’ wallets are still being squeezed. Approximately 87% of US citizens are concerned about rising costs, and as a result, shoppers have been keeping their eyes peeled for deals that soften the blow of inflation. Black Friday 2022 saw a US record of $9.12 Billion in spending. Meanwhile, businesses recognize the need to capture new loyal customers that stick around and keep returning long after Black Friday and the holiday shopping period. Companies should take a lesson from the last three months and use them to start planning for an even more successful 2023.
Tighter economic times heighten the need for great customer experiences that keep customers coming back for more. Businesses have been unable to swallow the impact of inflation and so it becomes more important to provide a positive experience that makes customers feel they are getting good value for money. Unfortunately, shoppers will be aware of the headlines forecasting a US recession in 2023, and as storm clouds start to gather, discretionary spending tends to drop. With less spending money sloshing around in the economy, businesses have to fight tooth and nail for their share of customer dollars.
Companies must design relationships with customers across multiple touchpoints to build lasting and deep relationships. On Cyber Monday 2021, 39.7% of online sales were made on smartphones. And this trend is only on the rise. So if companies want to maintain market share in 2023 with discretionary spending budgets trending downwards, they’ll need to prioritize immersive digital experiences that make digital interactions with a brand as exciting as discovering a deal in the store
Apps, Omnichannel, and Augmented reality
For many, part of the excitement of Black Friday or Boxing Day sales is the adventure of discovering a great deal that nobody else has snatched up. Online shopping risks losing some of the excitement and shared rituals of Black Friday. As more and more of these experiences migrate to the e-commerce world, retailers need to strategize how to create the same feeling of anticipation and scarcity. Putting these experiences in place is the work of months not weeks, so businesses should take lessons learned from last quarter to improve their customer experience for next year and in years to come.
Fortunately, with every busy holiday season that comes and goes, more exciting technology arrives to make the digital experience more immersive. Accordingly, the rapid development of augmented reality technology has seen fashion outlets launch apps that allow customers to try on clothes virtually. They can check whether a color or style suits them, and enter into the imaginative exercise of buying, without leaving the comfort of their living room. Similarly, Walmart has rolled out an app that shows customers what TVs or home décor items look like in their homes.
Augmented reality can add excitement to the brick-and-mortar shopping experience as well. Customers can point their device at a shelf and filter out what they want, by price or category. Apps can also ensure that customers don’t have to waste time searching for a particular product, with wayfinding features now directing them straight to the product or deal they are looking for.
However, brands should not try to replace in-person experiences with digital. A good omnichannel strategy includes a human touch at every point of contact. In-store technology will make the shopping process more seamless, freeing up sales assistants from mundane tasks so they can provide more valuable interactions like offering recommendations or answering more complex questions. Similarly, for apps and websites, personalization, and the opportunity to chat with a human help brands avoid becoming faceless and impersonal.
Driving personalization this New Year and beyond
In order to offer true personalization, relationships between customer and brand will need to involve a deep value exchange for customer data. Retailers should start 2023 by teasing promotions and building brand trust. This should build engagement and sales throughout the quieter months and set businesses up for next Black Friday and Christmas. By boosting engagement, personalization is improved and the biggest shopping events of the year like Cyber Week can be curated to be as immersive and rewarding as possible. Customers can be targeted with recommendations for new purchases, advertising, and marketing content over an extended period. This builds engagement, boosts loyalty, and ensures businesses don’t lose money by offering customers deals when they would happily pay full price. Finally, and perhaps most importantly, retailers should use data insights gained from these two pivotal days to tailor their communication with each customer.
There is no more important period than the final quarter, with days like Thanksgiving, Christmas and Black Friday bringing in 30% or more of total earnings for some retailers. Businesses that pulled out all the stops to win wallet share from their competitors over the last few months will be well-positioned to pull off a profitable 2023. However, with main street rents due in January, companies should also consider how to retain customers in 2023 – and as far ahead as Cyber Week next year. They’ll need to leverage everything they have learned about their customers over the last few months to crack customer engagement and build brand-customer relationships that last the distance.
Originally published on smallbusinesscurrents.com