In this interview, moderator Keith Jelinek, co-lead of our Performance Improvement Advisory Practice, kicks off Ankura's five-part series dedicated to helping retailers excel in the crucial fourth quarter. This segment features Chris Ventry, who shares expert strategies for marketers and retailers to implement now, ensuring a successful and profitable holiday season.
Keith: My name is Keith Jelinek and I co-lead our Performance Improvement Operational Advisory Practice here at Ankura.
We are just a short period away from the “official launch” of the holiday shopping season, Black Friday. Retailers have planned for the last 10 to 12 months in preparation. They, and the Consumer, have had to navigate a lot of turbulence from geopolitical unrest, inflationary pressures, shipping & fulfillment challenges, the increasing cost of labor, a rocky economy trying to mend itself, vacillating consumer confidence, and to top it off, a presidential election cycle.
We all know that these last two months of the calendar year can make a difference from being in the red or being in the black from a profitability standpoint. Slight adjustments now to strategies and tactics can make all the difference, especially since this year is a shorter selling season.
As final preparations are underway, our retail expert team has prepared a holiday readiness checklist spanning across five key functional areas: supply chain, marketing, store operations and labor planning, digital commerce, as well as inventory replenishment and allocation.
Blended with our own experience to develop our holiday checklist, we have also included responses from our recent consumer holiday survey to be able to provide a very fresh perspective on what is most important to the customer this holiday period.
In today's discussion, I discuss Marketing and Consumer Segmentation tactics with Chris Ventry. Chris is a Managing Director with expertise in performance marketing, customer acquisition, and multi-channel retail.
Let's jump in …
Keith: Well, Chris, thanks for joining us today. Let's spend a little bit of time and talk about marketing. A lot of planning has already been done to develop content. Media has been booked through agencies. Key products and product lines have already had supporting messaging and photography developed. There's going to be a lot of competition for consumers' wallets expecting big deals this year.
What last-minute tactical adjustments should retailers be thinking about to make right now?
Chris: Keith, good to connect. You're right, the holiday season has already started humming along. Marketers built out their holiday plans, promotions, messages, and traffic drivers months ago. Great retailers aligned their holiday marketing campaigns with inventory buys, key product trends, visual displays, and digital commerce navigation presentations. But this doesn't mean that there are not many things that a marketing team can do to drive sales and profitability over the next two months.
It appears that the “official launch” of the holiday season has a new king that has already come and gone, and that's Amazon's Prime Day. In Ankura's holiday survey, 49% of survey respondents stated that they planned to shop on Amazon Prime Day for their holiday purchases. For the first time in our survey, Amazon Prime Day dethroned Black Friday and Cyber Monday.
While this may have been a missed opportunity for some retailers, there are very many important shopping days ahead. For example, while Prime Day was important to Direct to Consumer (DTC) shoppers, marketers can mine their Content Management System (CMS) data to identify customers who prefer to shop in-store. Not everyone participates online, and there's time to actually hyper-focus promotions and traffic drivers for key shopping days like Black Friday, Small Business Saturday, and last-minute in-store shoppers.
We work with our customers to create targeted campaigns, and by targeted, I mean customer-specific price point and merchandise category-specific holiday offers. Customers will really be shopping all the way up until Christmas Eve, and you have to be open to this type of traffic. Maybe you aren’t quite hitting and converting right now, but an opportunity to go after and convert shoppers still in the market exists. By this, we would want you to create clear messages around products that are in stock and available as the season progresses.
People fear out-of-stocks, and if you promote that and put that front and center along with guaranteed delivery dates, that can help drive conversion. We really are seeing that the COVID supply chain hangover continues, least in thought with consumers. The scarcity of wanted products and slow delivery times really spooks customers. It is important for retailers to make certain that messages about guaranteed delivery dates are front and center to help drive conversion and to lessen their perceived fear.
We also are asking our marketing customers to be smart about customer segments and communication preferences—email, text, social media, etc. They're all very different. People respond differently. Speak to your customers in the language/medium they want to be spoken to. It's important to be able to speak directly to customers, and this is made more effective through segmentation.
While the economic and personal finances outlook appears to be showing some signs of improvement, this might not be the case for all of your customers. The Ankura Holiday Survey highlighted that Gen X and Boomers are seeing financial improvement, and thus they should be spoken to via value, quality, loyalty, in-stock messages, etc.
However, Gen Z has expressed a negative view on the economy and their personal finances. Our research highlights that about 50% of Gen Z and 40% of Millennials who participated in our holiday survey plan to increase significantly or increase somewhat the usage of buy now, pay later (BNPL) this holiday season. Clear messaging around BNPL, timely discounts, and targeted promotions are important to this demographic and will help drive conversion.
Other segments that you might want to look at using your CMS data would be to really go after deal seekers, and those might be people focused on discounts around Black Friday and Cyber Monday. For known last-minute shoppers make sure to send last chance offers reminders. Again, inventory availability is key, and also clear shipping cut-off dates. No one wants to receive a package late. And also evergreen shoppers. These are people who come to your store all the time, so engage with them throughout the season. They might be browsing one day and convert the next. Don't forget your best customers. Create unique offers, cash rewards, exclusive product offerings. Maybe create bundles that are specific to them or maybe potentially early access to a post-holiday sale, loyalty perks, etc.
Keith: Chris, this is really terrific. The insights that you have for our listeners on marketing. This plans to be a pretty spectacular Christmas holiday coming up. We know it's a shorter season. We know a lot of dollars have been spent on marketing, and now is the time to really critically stand back, make sure that those tactics are in place, and that you have a little bit of time to be able to finesse marketing plans as you go into the holiday. Your insights are going to be very helpful. So thank you very much.
We appreciate the opportunity to share our thoughts and hope you will find our holiday checklist of benefit. Along with the experiences shared from our team, as a reminder, you'll find a link to our checklist at the bottom of the page, and you can download it for your use.
Our Ankura performance improvement team has a proven track record of executing strategic plans to achieve sustainable performance improvement and targeted operating results to help maximize Earnings Before Interest, Depreciation, and amortization (EBITDA), cash flow, and shareholder value. Our expertise extends to all critical aspects of the retail enterprise. We work alongside clients to reduce costs and improve efficiencies. Ankura leverages its vast internal resources to assemble the perfect team for each client's unique challenges, guaranteeing optimal outcomes for complex problems.
Let us know if we can be helpful to you, and happy holidays.
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To assist retailers in preparing for this crucial holiday sales period, Ankura’s Performance Improvement team has developed the 2024 Holiday Readiness Checklist. This checklist outlines key focus areas to ensure your organization is aligned and ready to deliver on the essential drivers of sales success in the coming weeks. By adhering to the provided guidelines, retailers will be well-prepared to delight shoppers and gain a competitive edge.
Click here to access the 2024 Holiday Readiness Checklist.
© Copyright 2024. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
