All over Europe, Christmas offerings are traditionally in stores by mid-October. Historically this gave avid shoppers ten weeks to shop; and ten weeks to provide retailers with a significant proportion of their annual sales and an even higher percentage of annual profits.
All this was fine before the arrival of that interloper – the ecommerce channel. This relative newcomer has changed the game considerably and many retailers find themselves bringing merchandise in even earlier in an attempt to tickle the interest of shoppers. However, and conversely, holiday shoppers are leaving their purchase decisions closer to Christmas more than ever before. The ten-week shopping window is shrinking to six weeks, perhaps even five.
What do these new developments mean for retailers? They mean longer durations for which stores must hold inventory, shorter order fulfilment periods, last minute peaks in demand and larger end-of-season write-offs. Combined with capital constraints and consumer caution, this coming holiday season looks challenging to say the least.
Unfortunately, It's not just holiday shopping that has changed. Many other things have changed in the retailing landscape, decimating unprepared retailers and bringing several others to their knees. Thirty-one retailers in the UK went bust in 2011, affecting 2,469 stores. Another twenty-two have downed their shutters in the first half of 2012. It's clear that to remain in business today, you have to be a good retailer with a strong 'customer centric' focus. In our view, good retailers are those who create a robust value proposition and drive operational efficiencies that work 12 months a year, well beyond the holiday season.
Unfortunately, many retailers have not come to terms with the new meaning of 'customer focus'. Most of them have good systems dedicated to serving stores - their traditional channel and few have truly embraced the dramatic arrival of the online and mobile channels. Alarmingly, less than 10% of European retailers have an 'Omni' channel strategy, with little ability to seriously engage or impact the customer.
Today's customer has access to cheap smart phones, the ability to network with friends and other customers in real time, get more information and make smarter and faster buying decisions without help from store staff or their managers. He/she uses a variety of shopping modes – store visits, catalogues, online, mobile and phone orders. A retailer must influence the behaviour of the customer at each of these touch points. If you are not present across these channels, you've already lost the battle.
The key for retailers is to create systems that provide a seamless customer experience, regardless of the channel of interaction. Technology providers who have deep experience in the domain in the US, where such channels are proliferating, can help EU retailers create and integrate such systems. For retailers, there may be just enough time to adopt and integrate the new channels as part of a meaningful Holiday Readiness strategy for 2012.
Projecting the brand well and consistently must be the mantra for all retailers regardless of size or sector. Many acknowledge this but few embrace it, Burberry is an example of how such a strategy can help address the European market. Have you come across others?