Blog


Categories
Enter Keyword.

Top Five Lessons Retailers can Learn from the 2015 Holiday Season

Mihir Kittur, Co-founder and Chief Innovation Officer, Ugam,


Top five lessons retailers can learn from the 2015 holiday seasonThe past holiday season was a mixed bag for retailers. While online sales reportedly showed an upward trajectory, brick-and-mortar stores showed little growth during the intensely competitive time of the year. With the holiday season now behind us, it’s time to weigh in the key learnings and their implications for 2016 and beyond.

1. Customers are starting their product research early

While a majority of the holiday purchasing takes place between Thanksgiving and Christmas,  according to Google, about 61% of holiday shoppers had started researching their purchases before the Thanksgiving weekend.

What this means for retailers: In order to influence customer purchasing decisions, it’s important that retailers carry the right products at the right prices ahead of key shopping seasons. By leveraging “outside-in” analytics retailers can predict which products are likely to trend and how much they are willing to pay for them. This includes analyzing “outside” data, such as consumer search signals, product reviews, location, social media signals, and competitor data, and then directing their online merchandising initiatives to support those products.

Find out which retailers offered the top trending toys and electronics at the lowest prices before Thanksgiving.

2. Amazon is not always priced the lowest

Ugam’s analysis of the 2015 holiday season shows that between Thanksgiving and Cyber Monday, Amazon was priced the lowest for only 17% of the sample toys and only 40% of the sample electronics. In some cases, Amazon’s pricing was considerably higher than the competition.

What this means for retailers: Amazon implements smart pricing tools that have led consumers to perceive them as good value or lowest price providers. To be able to compete effectively and ensure greater success, retailers will need to sharpen their pricing capabilities and leverage other variables such as service and availability.

Find out how major retailers competed on price during the holiday season.

3. More can be done to minimize out-of-stock issues during peak shopping times

On average, major retailers went out-of-stock on 20% of the top trending electronics and 13% of the trending toys and games between Thanksgiving and Cyber Week. Our analysis also shows that while Walmart carried a majority of the top-trending electronics in its assortment, only half of those were always in-stock and available for purchase during the high-volume shopping period.

What this means for retailers: More than half the holiday shopping takes place between the weekend after Thanksgiving and mid-December, which makes it both critical and challenging to maintain sufficient inventory levels during this high-volume shopping period. Deploying “outside-in” analytics, which includes leveraging product, competitor, and market intelligence, can help retailers predict demand and stay better prepared for peak shopping seasons.

Find out which retailers went out of stock the most over the holidays.

4.Growth in online shopping is eroding physical store sales

According to comScore, more than $7 billion was spent online over the Thanksgiving holiday through Cyber Monday, up 10% versus the same time in 2014. Additionally, mobile spending grew by 53% compared to the previous year.  While online sales showed an uptick, brick-and-mortar stores reportedly showed a 10% decline in sales during the holiday season, according to ShopperTrak.

What this means for retailers: More and more customers are shopping online, which means forgoing a digital commerce strategy is no longer an option. Retailers need to provide a consistent omnichannel shopping experience by analyzing customer shopping behavior and designing digital strategies keeping their customers’ needs in mind.

Find out how you can re-design your omni-channel strategy by leveraging big data.

5.There’s a pressing need for improving dynamic pricing capabilities

Amazon established itself as the dynamic pricing leader, accounting for more than three-quarters (77%) of the price changes during the 2015 holiday season. While some retailers are getting smarter at pricing, they still lag far behind Amazon.

What this means for retailers: Amazon’s advanced dynamic pricing abilities allow it to evaluate demand signals and competitor data, and adjust prices accordingly. To be able to compete with Amazon and grow margins, retailers need to take steps to sharpen their dynamic pricing capabilities by acting on data about the demand and competition.

Here at Ugam, we have the expertise to help you make smarter pricing and assortment decisions. For more insights, download our report A Look Back: Amazon’s Pricing and Assortment Trends for the 2015 Holiday Season.



The Author:
Mihir Kittur is a Co-founder and Chief Innovation Officer at Ugam. He oversees sales, marketing and innovation and works with leading retailers and brands with insights and analytics solutions around their category decisions to improve business performance.



×

Sorry, your search did not match any relevant results.

×