The forecast for this year’s Christmas business looks a bit frosty. But with these five tips, retailers can retain their customers even in difficult times. AI plays a central role here.
Even though inflation has now fallen again, sentiment and shopping behavior among consumers are still rather subdued in the run-up to the traditionally busy Christmas season. According to that Salesforce Shopping IndexBased on data from more than 1.5 billion consumers from more than 67 countries, online order volume has been declining since 2022. In the second quarter of this year, compared to the previous year, there was another three percent decline globally and one percent in Germany. 40 percent of the customers surveyed want to buy less this year than in 2023 and are looking very closely at the prices.
In order for retailers to still be successful, it is more important than ever to use reliable customer data for decisions and insights from marketing campaigns. Based on the Shopping Index data, I have put together five tips that retailers can use to better adapt to their customers this season.
Tip 1: Be inspired by Asian retailers
This year more than ever, the price determines the purchase. Two-thirds of shoppers worldwide are looking for the cheapest deal. Only less than a third prioritize product quality as a feature. This is what makes Chinese shopping platforms like Temu and SHEIN so popular. During the Christmas season, 63 percent of those surveyed want to shop from Chinese suppliers. Regardless of the price, however, European retailers can be inspired by the success strategies of Chinese providers, for example in terms of recommendation programs and campaigns or the use of gamification elements such as a wheel of fortune or group shopping offers. They should also use data-based analyzes to best adapt to the wishes of their customers. These include AI-driven trend detection and data-driven decision making.
Tip 2: Use AI as a catalyst for more sales
Generative AI has taken over the world at an unprecedented pace over the past year. People also like to use their artificial shopping advisors for search queries and product recommendations. AI-supported product recommendations and chatbots will also determine the Christmas business. 53 percent of shoppers surveyed by Salesforce are interested in using generative AI to find the perfect gift. This is confirmed by the figures from last year: At Christmas 2023, AI influenced 17 percent of online purchases, generating online sales worth $199 million worldwide in November and December 2023.
AI can be used specifically to reduce costs or increase sales in the Christmas business. In customer service, AI, such as chatbots and generative tools for content creation, can automate processes and reduce processing times. In addition, predictive technologies such as product recommendations and sorting algorithms can increase sales by showing customers relevant offers.
Salesforce, together with Agentforce, also presented a new approach to AI-driven automation. Specialized AI agents can make data-based decisions in real time and therefore carry out entire processes largely independently. You not only contribute to increasing efficiency and reducing costs, but also to customer satisfaction and loyalty an example from Wiley Publishing shows.
In customer service, AI agents independently solve common retail service cases such as WIZMO (Where is my order), exchanges, and refunds, thereby increasing employee capacity, especially during peak times. AI-supported shopping advisors in the form of autonomous agents hold enormous potential and will be available soon. You have 1:1 conversations with customers either on the website, via messenger or by phone, help with product searches and make personalized product recommendations. The requirements for this are: The customer data must be prepared for trustworthy and secure access. This is achieved by companies breaking down data silos and harmonizing data across applications. The integration and adaptation of the agents can then be carried out in just a few simple steps.
Tipp 3: Build a trusting relationship for customer loyalty
Customers reward their favorite retailers with loyalty if they feel seen. According to the Salesforce Shopping Index, the proportion of repeat buyers worldwide was 43 percent in the first quarter, an increase of eight percent since 2022. The forecast is: Two out of five Christmas purchases this season will end up in the shopping carts of people who have already shopped in the shop in question.
But this reliability is no coincidence; consumers also want to see it rewarded. They prefer brands and retailers that offer loyalty programs. 46 percent name collecting and redeeming loyalty points as the second most important factor in their purchase decision after price. 63 percent of customers shop more in stores where they can collect and redeem loyalty points.
Tipp 4: Do not pass on additional shipping costs to all customers
Providers have to prepare for almost twice as much shipping costs as last year. However, retailers should not pass these costs on to all customers in the form of shipping or return costs: free shipping is one of the three main reasons for a purchase decision. In order to still reduce costs, retailers can, for example, motivate online customers to pick up their goods in store or reward loyal customers with free shipping in contrast to one-time buyers.
Tip 5: Don’t forget the mandatory tasks
Last, but not least, “homework” is of course also important in order to achieve optimal results. This includes an analysis of previous peak seasons in terms of shop inventory and demand in order to avoid both supply bottlenecks and overflowing warehouses. The resources in customer service and fulfillment also need to be checked for the seasonal peak and, if necessary, adjusted to the increased order volume. This is where AI agents can provide valuable support, like this Example from the American retailer Saks shows. For omnichannel retailers in particular, it is extremely important that services such as BOPIS (Buy Online, Pick-up In-Store) or Click & Collect function smoothly.
Everything should be ready to go by the start of Cyberweek at the end of November at the latest, because as the established highlight of the shopping season, it drives buyers to retailers in droves – this is confirmed by two thirds of the customers who buy this week mostly on the internet. On Black Friday, for example, 72 percent shop online, compared to 31 percent in stores.
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Nino Bergfeld is Director Retail Advisory Salesforce, is very familiar with AI, Web3 and retail potential and shows retailers how to be successful in keeping with the times.
Source: onlinemarketing.de
