by Veronika Sonsev
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Retail Expert Veronika Sonsev Shares 5 Insights for a Winning Holiday Season

Editor’s note: Veronika Sonsev may be stuck at home like the rest of us, but she hasn’t lost her line of sight into what separates thriving retailers from stragglers in these strange COVID-19 times. The co-founder of CommerceNext and Retail Practice Lead at Chameleon Collective spoke to Persado about the general picture in retail and offered 5 insights for what retailers need to do to set themselves up for success this holiday season.

 

1. Category helps, but it’s not enough

General merchandise retailers have really stood out this year. Clearly, they benefited from the fact that they were considered essential during lockdown, but a few pushed themselves way ahead of their competitors by getting creative.

Walmart is a shining example of that right now. Walmart has grown tremendously due to the fact that the stores remained open during the lockdown, but they also scaled their previously successful curbside pickup program. And when no one had enough delivery people to fulfill online orders, Walmart partnered with the social media app Nextdoor to match vulnerable community members with other locals who could shop for them.

For this holiday season your decisions need to be made with near-real-time data and imperfect information – it’s time for speed over certainty.

Walmart also made a number of smart marketing moves by doing things like hosting drive-ins during the summer so people could watch movies in the parking lot, and partnering with Camp to offer digital camps for kids. Right now, the company is working on expanding grocery delivery to drive loyalty.

The lesson I see from Walmart is that even in a thriving category, the most successful companies have also been particularly thoughtful to give themselves a leg up.

2. New strategies separate leaders from laggards

The apparel sector offers some good examples of strong and weak crisis responses. Given that apparel has been mixed in terms of sales this year, it’s interesting to look at the different responses from brands in hot and weak subcategories. Take athleisure: We’re all sitting at home in our leggings, so athleisure as a category overall is doing really well. But Lululemon stands out more than the average because it’s been clever. Lululemon has leaned into the fact that we’re all at home and the holidays are coming. People are going to want to shop, but many are also going to want to be socially distanced. Lululemon has an ecommerce site, but it is also opening multiple locations in the same shopping mall, so if someone wants to go in person, they have options to shop in-person and still social distance.

People are going to want to shop, but many are also going to want to be socially distanced.

Fashion is in a different situation, since people aren’t buying as much clothing for work or social gatherings right now. To cut through that, a few companies have had to take a different approach. For example, Hugo Boss, which is mostly known for men’s suiting, redid its homepage to focus on their casual clothing lines. That doesn’t completely get a brand like Hugo Boss recoup lost revenue, but it helps it do better than it would otherwise.

3. Double down on high-demand products

Hugo Boss isn’t the only apparel company to rebound by narrowing its focus to product categories that are in demand right now. Land’s End, which has stores but sells primarily online, focused promotions on lifestyle products like outdoor wear or camping gear, which people are really embracing. Also, “fast fashion” retailers like H&M and Zara took an early hit and then recovered because people who have less these days appreciate their price point during these recessionary times.

That won’t work for every brand and product set — you can’t be a retailer that sells gowns and dresses and then start selling hiking boots. That kind of pivot is too far. But you can take advantage of relationships or access to deliver products that are still in demand.

The mattress brand Purple did this when it was quick to see that one of its products, a seat cushion, could work well for people setting up home offices. Purple made multiple variants of the cushion, while also putting some of their manufacturing capacity to mask-making, since the brand had an upholstery material that worked well for masks. In parallel, Purple was also donating mattresses to hospitals that were housing COVID-19 patients. In what could have been a very bad year, Purple finished the third quarter with more cash on hand than they started with.

4. Prepare to make fast decisions to deal with holiday challenges

This holiday season is clearly going to be different from previous years, but we aren’t flying totally blind. There are some constraints that we already know are going to exist and that retailers can prepare for now.

Set up a war room, get all the information you need and make it readily available, and convene the people who need to be there to take action.

For example, this year is going to be a predominantly digital holiday, which will strain the shipping system. Distributors are already talking about putting caps on shipping, so retailers need to be prepared, anticipate bottlenecks and have a plan for resolving them.

I had a recent conversation with Charlie Cole, the CEO of FTD, the floral delivery company. FTD relies on local florists to prepare the arrangements and deliver them to customers, but when whole states were in lockdown, those florists weren’t open. Charlie and his team had to consider everything. Could they ship directly from their suppliers in South America? Could they come up with alternative ways of shipping and doing customer service?

Brands that are willing to be nimble like that will be most successful. That requires an internal ability to make fast decisions and act on them. Set up a war room, get all the information you need and make it readily available, and convene the people who need to be there to take action.

5. Use your data, but with a smaller look-back window

Fast also applies to data access and analysis. Retailers are used to planning their holiday season based on years of forecasting data. That’s not going to work this year.

The typically long ordering cycles in supply chains have proven to be a real issue. Back in March, companies canceled orders, and by the time they realized they still needed them, they couldn’t get them back.

That doesn’t mean data isn’t critical. It is — perhaps more so than ever — but the look-back window might be shorter. Maybe decision makers are looking at a week’s worth of data. Maybe they’re looking at a few days.

For this holiday season your decisions need to be made with near-real-time data and imperfect information – it’s time for speed over certainty.