The rise of the annual inflation rate to 8.6% in 2022 may cause you to worry about whether you’ll be able to keep your profit margins healthy this holiday season, especially after returns take a bite out of your profits.
However, reports show that consumer spending remains relatively steady—and if you focus on strategies to make sure that you’re delivering a great customer experience, you’ll be able to ensure that your shoppers remain loyal to your brand.
In order to do that, stay tuned into trends like how consumer shopping is changing, especially around the holidays. This will boost sales and lower return rates. You can also offer incentives, recommendations and options to personalize the shopper’s experience.
If a return does happen, implement tactics to turn the process into a positive experience, ensuring a repeat shopper.
As you enter the holiday season, here are a few things to keep in mind:
Identify who is shaping trends
As the third largest generational segment at 67 million people, Generation Z is changing the way young consumers spend money. In turn, they influence the way their families are shopping.
This new generation prefers a combination of mobile shopping and retail stores to make their purchases. Despite having a large online presence, over 81% of Generation Z still prefer to shop in person at stores – so even if you have a successful ecommerce business, it may be worth looking at expanding into retail stores in the future.
More than anything, they want to understand where their money is going. Knowing the company’s values, whether its products are sustainable or ethical and how the company handles diversity and inclusion is a high priority.
When it comes to higher-end goods, luxury means something else than it has to previous generations. From February 2021-February 2022, Generation Z luxury purchases made up 60% of the total luxury sales. Rather than buying items with a high-end name on them, Generation Z values products that social media influencers personally recommend. They also prefer an individualized experience, actively seeking out products that help them stand out and be unique.
Know how and why your shopper is buying
Many consumers are spreading out their spending, starting as early as October in the hopes of saving money. Knowing this, you might want to move marketing campaigns up earlier next year. Sales could begin before December to engage your audience.
Using omnichannel marketing to reach consumers should be a high priority. Experts have predicted that ecommerce spending will grow between 10% and 12% this holiday season. It’s not enough to simply promote your company through emails and social media. All of the messaging should work with each other across platforms. This creates stronger, more effective brand messaging.
Implement tools like Instagram Shopping, which allows you to highlight items in your posts. Buyers can easily click and buy products through the app.
Influencers are now becoming more trusted than celebrities when it comes to shopping. Through channels like Tik Tok and Instagram, followers feel as though they know the person and trust their opinion. Employing marketing techniques like sponsored videos or Instagram live videos to show off your products is a surefire way to connect with consumers and make them want to visit your website.
Offer personalized suggestions that speak to their values. If they’re a long-time buyer, send them a nudge by email or text about items they’ve saved to their wishlist or left in their cart.
Gift guides or curated shopping lists are a solid way to personalize the consumer’s experience. It also helps them feel valued and seen.
Cross-selling is a good way to add a complementary product to their exciting purchase, either at check-out or further down the road. When a shopper heads to check out, suggesting an accessory or add-in to their product might convince them to add it to their cart. Alternatively, if they have been using an item and it involves a part that needs replacing, reminding them to buy a new part shows you care about them and at the same time, boosts sales.
Upselling can also be a great tool, especially around the holidays. Offer enhancements to their purchases such as discounts on multiple items, personalization options, faster shipping, gift wrapping or insurance protection.
Shopping apps that allow payment plans have become more popular because it allows consumers to buy more high-end products they wouldn’t normally buy. Learning more about what is going through the shopper’s mind when they reach for their wallet will help reduce the risk of post-purchase cognitive dissonance. If they do decide to start the return process, learn why they are returning the item and make the process as smooth as possible with options like drop-off shipping to ensure a repeat shopper.
As a side note, offering significant discounts on items ultimately could hurt your bottom line. This can wind up costing you revenue. It’s important to be mindful that sales should only be implemented if they are benefiting you in the long run.
Turn a return process in a return shopper
Despite your efforts, returns are inevitable. In 2022, consumer returns increased by 6% or $761 billion, making up 16.6% of total sales. Additionally, returns made up 20% of items purchased online compared to 9% bought in a brick-and-mortar store. But don’t let that get you down: this is simply another opportunity to help turn a shopper into a recurring customer.
Some returns occur due to buyer error, so if a buyer makes a mistake while purchasing an item, help rectify the situation as quickly as possible. You can allow order editing and use order notifications to alert buyers on the status of their purchases. Make sure your customer service is responsive and fixes the order before it gets shipped. If communication is clear and efficient from the get-go, this will prevent a consumer from canceling the order altogether.
Some shoppers may not have the time or energy to start a return right after the holidays. Offering a flexible holiday return policy shows you’re willing to make things right and creates a positive experience.
If they are returning an item, using a platform like Loop can benefit you because you can ask them the reason for their return, then encourage them to purchase a different item that might better meet their needs. Ask them questions about their purchase and offer personalized product recommendations. This allows them to instantly exchange an item and receive another product.
Additionally, offer the buyer a “bonus credit” along with their return. If they decide to purchase a new item, rather than getting a direct exchange, this can be a way to encourage them to buy a higher-end item. For example, if you offer them a $20 bonus credit on top of an $80 dollar item, they might go ahead and decide to buy an item worth $100. Not only will this upsell increase revenue, but this might just be the incentive they need to become a repeat shopper.
Want to learn more about how Loop can help you turn seasonal shoppers into loyal year-round shoppers? Try out a demo.