Companies know that presents under a tree have had an entire journey before being wrapped in pretty bows and reaching homes for the holidays. With the busiest time of the year for retailers well on its way, Rokt hosted a roundtable event on September 29th to help businesses prepare for the holiday season. Steve Sadove, former Chief Executive Officer of Saks Fifth Avenue and advisor to Mastercard, moderated the conversation with ecommerce executives including Sarah Rasmusen, Executive Vice President & Chief Customer Offer at Lands’ End, Charlie Cold, Chief Executive Officer of FTD, and Elizabeth Buchanan, Rokt’s Chief Commercial Officer. Here are some of the insights they shared:
- How to maintain momentum and keep your revenue going in a post-pandemic world.
- How to create relevant customer experiences for the digitally-savvy customer who expects personalized content and offers.
- How retail media networks will continue to be the next big wave as more companies recognize it as a high-value revenue stream.
Keeping revenue momentum going in a post pandemic world
From the start of the COVID-19 pandemic to now, retailers have seen a purchase shift from goods like TVs and devices to experiences. While areas like travel and hospitality are still recovering, categories like apparel, grocery, and home have all seen 15%+ increases since 2019, and many retailers are seeing the numbers even out despite huge spikes in transactions during the height of the pandemic. “Go look at what happened to the search term ‘flower delivery’ in 2020, ” said Charlie Cole of FTD, a floral and gifting industry leader. The company saw its highest numbers in its 110 years of business due to the pandemic. Numbers that high were an anomaly, and now they have been able to adjust expectations and forecast changes in demand.
Numbers may have settled, but consumers purchase tendencies sure haven’t. Cole shares his forecast for the future consumer, “You’re going to see the customer double down on who they are–if they’re premium, they’re going more premium, if they’re value, they’re going [with] more value”. Sarah Rasmusen, Chief Consumer officer for Lands’ End agrees and adds her observation of customers shopping more “in the moment”, shopping when they need something compared to where historically customers may have shopped for it well in advance. “She’s buying ‘in the need’ and not price-shopping with the things that she needs,” Rasmusen adds.
Creating a relevant customer experience with digital media
While the digital space continues to evolve, all the panelists have seen one common trend: consumers are getting increasingly comfortable with shopping online. Not only are they more comfortable with shopping online, they’re looking for customizations within their purchase experience that are relevant to them.
“Cart value means making sure you’re not overwhelming the customer with too many options,” Buchanan said. She continues to explain how vital it is to ensure that customers feel understood by cutting down repetitive ad experiences. In addition, organizations are able to tap into what buyers are most interested in by hand- selecting options for their consumers.
Consumers are expecting personalized experiences and keeping these experiences fresh and relevant will be key. Consumers today are more digital and are smarter. They realize that they can get anything, any place, any time. Cole points out, “They’re starting to realize the ubiquity of the internet and that they can get the goods they want, when they want it. You need to ask yourself, why does the customer need you? Consumers want to spend their dollars buying a quality product from a quality company, and you need to differentiate yours for retention. ”
Profitability under pressure
When it comes to increasing profitability during a time of heightened competition, businesses need to think outside of the box or maybe look inward. This comes in many forms like team structures and website profitability.
Monetizing businesses has become a science, literally. According to Rasmusen, “You have to start looking for other places to find profitability. Companies like Lands’ End have adopted a work smarter not harder approach to their internal teams. It used to be that merchants and retailers managed their own promotions and markdowns, and this has since been changed to the data science team to drive a strategic approach to profitability.”
Like many retailers, Lands End has looked to their own partnerships for a new source of revenue. With businesses driving a strong ecommerce side of the business, your website offers real estate for relevant ads, and resellers want to pay for those prime placements. “There are ads throughout the shopping experience and we work with Rokt in the post purchase capacity,” Rasmusen said. By offering up webspace to relevant advertisers, you’re allowing revenue streams to seamlessly integrate through an online consumer journey.
Maintaining margins with inflation
Inflation is continuing to see rates at 7-8% which means that companies need to rethink how they are pricing for profitability and looking at shipping costs.
There is a balance between driving monetization despite increased material costs and facing resistance from the consumer. “I have not seen the level of resistance that I thought, I would passing the [increased] price onto the consumer, but I wouldn’t bank on that. There’s going to be a tipping point,” Cole said. If something is a dollar more, offering only a slight benefit, they have seen consumers still opt for the more affordable price point.
As shipping costs become increasingly expensive and (and with more persnickety consumer expectations), it is important to look into alternative order fulfillment strategies. “You’re going to have to start thinking about unique ways to fulfill orders since the price has gone up,” Cole says. These are ways to optimize your business to drive stronger results during economic uncertainty. Companies can also balance freight costs with technology like Rokt’s that increases your business revenue to balance out the heightened cost of freight.
These last couple months leading up to the holidays are crunch time for retailers, especially digitally. The data you can leverage about your audience and their behaviors is the gift that keeps giving, and now’s the time to create relevant customer experiences to stand out from your competition. As uncertainty lies ahead both through December and onward, look into all the ways that your company has overperformed, and make educated risks to help your business stay in touch with its core audience.
Check out our event on demand here.